As Bitcoin [BTC] approaches a market top, many altcoins are also expected to surge, driven primarily by investors seeking to diversify their portfolios and reduce risk.

As a result, the cryptocurrency market is excited about the prospects of the upcoming altcoin season, with many tokens expected to capitalize on the recent momentum and, in many cases, outperform BTC.

Altcoin season may have to wait a while longer

In theory, altcoin season begins when 37 of the top 50 altcoins outperform Bitcoin on a 90-day average.

Currently, the chart shows that 17 of the top 50 altcoins are outperforming Bitcoin, with SUI leading the way with a staggering 155% gain. Typically, altcoins move in sync with Bitcoin, reaching local highs when sentiment around BTC is bullish.

This happens because investor confidence in Bitcoin often spreads to the altcoin market, encouraging traders to seek higher returns in these alternative assets.

Historically, halving years have marked the beginning of an important re-accumulation phase for Bitcoin, which is usually followed by a peak that explodes higher.

However, solid accumulation has yet to materialize, which is critical in determining the outlook for the altcoin season. Therefore, unless BTC retests its ATH, altcoins may only achieve short-term gains.

A lot depends on Bitcoin

Contrary to popular belief, I believe Bitcoin could be about to undergo a price correction and unless this level flips into support, the price could fall back below $64,000.

This pullback would be BTC’s fourth potential retracement since the last time it approached the $66,000 ceiling. Only by breaking through this barrier would a new all-time high be possible.

As mentioned earlier, the criteria for an altcoin season depends largely on Bitcoin’s initial move. Once Bitcoin gains momentum, altcoins typically follow suit.

However, by mid-cycle, many altcoins tend to post higher daily gains than BTC. This would mark the beginning of an altcoin season, especially if more altcoins show resilience during the expected BTC correction.

Therefore, it is crucial to keep a close eye on altcoins during this potential downturn. If most altcoins can follow the trend and rise sharply, the possibility of entering an altcoin season at the end of the next cycle may increase.