Altcoins are gearing up for one of the biggest cryptocurrency market rallies in history, with analysts predicting that the entire market cap will grow 5x from now to $7 trillion. A strong technical setup suggests that the sector is about to see a major crash similar to the 2021 bull run.
Is the altcoin space preparing for a 5x rally?
Cryptocurrency market analysts expect altcoins to kick off a super bull run in the first quarter of 2025 as technical charts show a similar pattern to that before the 2021 bull run. By connecting the market cap peaks of the previous bull runs in 2018 and 2021, the chart below shows that the next peak could be around $7 trillion.
In December 2024, the cryptocurrency market experienced extreme volatility, with Bitcoin prices fluctuating between $90,000 and $110,000. According to data from CoinGecko, the current market capitalization of all cryptocurrencies, except Bitcoin, is slightly below $1.5 trillion. However, the current situation indicates that the market has formed a strong bottom, suggesting that the correction for altcoins may be over.
Moreover, the altcoin season index has formed a strong base at 47 points after dropping from last month's 88 points on December 4. Furthermore, with signs of a decline in Bitcoin's dominance, this index may rebound from now on.
Strong recovery in the cryptocurrency market
The current trends in the cryptocurrency market show strong upward momentum, with top altcoins contributing the most. XRP prices rose by 15%, leading the pack, while other participants such as Solana (SOL), Dogecoin (DOGE), Cardano (ADA), and Avalanche (AVAX) saw increases ranging from 6-10%. Thus, driven by overall optimism, the start of 2025 seems quite strong.
Steno Research predicts that in 2025, Bitcoin (BTC) and Ethereum (ETH) will exceed $150,000 and $8,000, respectively. Furthermore, analysts are increasingly optimistic about the upcoming altcoin season.
The optimistic forecasts for Bitcoin and Ethereum are accompanied by a highly favorable regulatory environment for cryptocurrencies, supportive macroeconomic backdrop of declining interest rates, and expectations of improved liquidity. Additionally, the report notes that the year following Bitcoin's halving has historically been very optimistic for the crypto market. It adds:
“In addition, the institutional adoption rate is expected to reach unprecedented levels, thanks to the massive inflow of funds into Bitcoin and Ethereum ETFs in the United States.”
In January 2025, tokens like AI agents and ai16z may enhance market dominance. Other crypto events (such as token unlocks, Solana ETF approval deadlines, etc.) will determine the direction of future market trends.
