As Bitcoin [BTC] approaches its market top, many altcoins are poised for a price surge, largely driven by investors looking to diversify their portfolios and mitigate risk.
As a result, the crypto market is abuzz with the prospect of an upcoming altcoin season, where many coins are expected to capitalize on the recent rally and in many cases, outperform BTC.
Altcoin Season May Have to Wait a Little Longer
Theoretically, altcoin season begins when 37 of the top 50 altcoins outperform Bitcoin on a 90-day average.
Currently, the chart shows 17 of the top 50 altcoins outperforming Bitcoin, with SUI leading the way with an impressive 155% gain. Typically, altcoins move in tandem with Bitcoin, hitting local highs when sentiment around BTC is bullish.
This happens when investors' confidence in Bitcoin often spills over into the altcoin market, encouraging traders to seek higher returns from these alternative assets.
Historically, halving years mark the crucial start of Bitcoin's re-accumulation phase, often followed by a boom peak.
However, solid accumulation has yet to materialize, which would be essential to establish the prospect of an altcoin season. Therefore, unless BTC retests its ATH, altcoins can only see short-term gains.
A lot depends on Bitcoin
Contrary to popular belief, AMBCrypto believes that Bitcoin could be about to correct its price, potentially dragging it below $64,000 unless this level turns into support.
This correction would be the fourth potential retracement since BTC last hit the $66,000 ceiling. Only after breaking this barrier would the possibility of reaching an all-time high become a reality.
As mentioned earlier, the criteria for an altcoin season largely depends on Bitcoin's initial move. When Bitcoin gains momentum, altcoins usually follow.
However, in the middle of the cycle, many altcoins often have higher daily gains than BTC. This would signal the beginning of an altcoin season, especially if many altcoins show resilience before the expected BTC correction.
Therefore, it is important to keep a close eye on altcoins during this potential downturn. If most altcoins are growing significantly, the possibility of entering an altcoin season at the end of the next cycle may increase.
