The calls for a potential “altseason” are growing louder as Ether approaches the $3,000 mark, but some analysts are warning that it may not happen so soon.
On February 19, Ether (ETH) reached an intraday high of $2,980, its highest level in 22 months. The last time the asset traded above $3,000 was in April 2022.
The price movement has led many observers to believe that an “ETH bull market” is imminent, while others have declared that altseason has already returned to the crypto market.
Apollo Capital’s chief investment officer, Henrik Andersson, agrees that there are several powerful catalysts that could spark an altcoin rally, including Ethereum fundamentals such as the Dencun upgrade and the mainnet launches for scaling solution Blast and restaking platform EigenLayer.
Yuga Cohler, a senior engineering manager at Coinbase, also believes that an ETH bull market is on the horizon, which he sees as a positive development for altcoins.
Economist and trader Mikybull Crypto predicts that March will be a bullish month for ETH, with $3,000 within reach. They anticipate that this altseason will be significant.
However, Markus Thielen, head of 10x Research, disagrees and argues that there is a lack of evidence suggesting an altcoin season is coming. He believes that sustained reductions in Bitcoin dominance below 45% are necessary to kickstart a viable altcoin season. He also points out that recent altcoin rallies have quickly fizzled out, indicating a higher risk-adjusted potential favoring Bitcoin investments.
Thielen also highlights that Ethereum’s momentum seems to be driven by potential ETF approvals in May rather than increased on-chain activity within decentralized applications.
On February 20, blockchain analytics firm Santiment reported that most crypto projects have generated profits for the average wallet on a mid to long-term timescale, apart from a few lagging altcoins. However, they caution that their model is indicating overbought signals, citing the market value to realized value (MVRV) metric. This metric reveals a higher risk than average in buying or opening new positions while markets are in the midst of a 4+ month surge.
In conclusion, while the possibility of an altseason is generating excitement, analysts have differing opinions on its timing and sustainability. The market remains cautious amid the recent price movements and the potential risks associated with altcoin investments.