As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed countless market cycles and trends. The recent price action in Bitcoin, while not entirely unexpected, has certainly piqued my interest, especially given the bold prediction by VanEck of an “altcoin season.
In the past week, Bitcoin’s price has dropped from its record high of $108,135, reaching as low as $92,500 within the last day. Even though it’s still above the $90,000 threshold, this dip has caused some uncertainty about its short-term growth path and sparked renewed interest in the altcoin market.
Despite the fact that the altcoin market has followed suit in correcting Bitcoin’s price decrease, many investors and experts are anticipating an upsurge of altcoins shortly. VanEck has expressed this prediction with certainty on social media platform X. According to the investment company, the cryptocurrency sector is currently experiencing an altcoin phase that began on November 27.
Altcoin Season Is Here Already—VanEck
The dominant digital currency, Bitcoin, has found it tough to sustain its price growth above $100,000, leading to speculation about future market directions. Some Bitcoin supporters predict a new spike in 2025 due to the anticipated Trump administration in the U.S., but other crypto experts are shifting their focus towards alternative cryptocurrencies (altcoins). Intriguingly, analysts from VanEck propose that the current crypto climate may advantage altcoins over Bitcoin.
Matthew Sigel, who leads digital research at VanEck, discussed this trend, stating that Bitcoin’s leading position in terms of market value, trading activity, and volume typically sets the stage for alternative cryptocurrencies (altcoins) to surpass Bitcoin. Sigel further pointed out that when capital enters the market, it tends to fuel a ‘risk-on’ mentality, which significantly benefits emerging crypto applications within sectors such as decentralized finance, gaming, and Non-Fungible Tokens (NFTs). This positive impact on these altcoin niches often results in the overall altcoin market outpacing Bitcoin.
VanEck’s perspective on the altcoin trend additionally incorporated findings from Artemis’ Altcoin Season Index, a tool that quantifies how frequently the top 50 altcoins surpass Bitcoin’s performance over a 9-month span. As per this index, which spans from a value of 0 to 1, an altcoin season initiates at a reading of 0.6. At present, the industry appears to be in an altcoin season, as the index currently exceeds this level, having recently risen to 0.8. This indicates that funds previously made from Bitcoin are likely to shift towards top-performing altcoins.
Diverging Views On Current Metrics
It’s worth noting that Artemis’s Altcoin Season Index diverges from traditional metrics like those offered by CoinMarketCap in its definition of an altcoin season. According to CoinMarketCap, an altcoin season is a phase where 75% of the top 100 altcoins outperform Bitcoin over the past 90 days. At present, the index stands at 51, having reached a high of 87 on December 4.
Nonetheless, many market participants are anticipating an altcoin season, with many betting on the overperformance of many top altcoins against Bitcoin. According to a recent technical analysis by crypto analyst Captain Faibik, altcoin season has officially begun.
“$BTC (Dominance) Rising Wedge Breakout + Retest confirmed! #Altseason has officially begun—get Ready for the ride! ,” he said.
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2024-12-24 14:46