Bitcoin (BTC) saw a significant drop on February 20, falling 4% from its intra-day high of $53,019 to a low of $50,812. This decline has led traders to reassess the overall state of the cryptocurrency market and debate whether the altcoin season has arrived.
Traders and market analysts believe that this price correction is part of the Bitcoin halving cycle, with BTC potentially experiencing a pre-halving retracement before entering a post-halving parabolic uptrend. Crypto trader and analyst Rekt Capital shared a chart indicating that Bitcoin has one more pre-halving retracement before resuming its upward trend.
Market analysts have also noted that funding rates for BTC were high, suggesting that a correction across the board could be expected. Additionally, significant moves in mid-tier traders have been seen as signals for profit-taking and dip buys, indicating that traders may be preparing to buy the dip in the event of a pullback.
Altcoins have performed well in the past year, with some outperforming Bitcoin. For example, Solana’s SOL has gained 308%, Avalanche’s AVAX 80%, and Chainlink’s LINK 136%. However, Bitcoin’s year-to-date performance still surpasses the aggregate altcoin market capitalization.
Although Ether began to outperform BTC after the approval of spot Bitcoin ETFs in January, its performance fell below Bitcoin’s on February 8. Glassnode, a market intelligence firm, notes that Bitcoin continues to dominate the market, with approximately $20 billion in capital inflows per month at present.
While signs of an altcoin season are starting to emerge, it may still be too early to confirm its arrival. The altseason indicator from Glassnode has shown positive momentum since October last year and turned positive on February 4. However, for an altseason to be declared, at least 75% of the top 50 altcoins would need to outperform BTC.
In conclusion, while signs of an altcoin season are beginning to appear, it may be too early to make a definitive statement. Investors should conduct their own research and exercise caution when making investment decisions.