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As Bitcoin (BTC) reaches a new all-time high (ATH) of nearly $112,000, market analysts are forecasting an imminent altcoin season, driven by the current bullish sentiment fueled by significant regulatory advancements in the cryptocurrency sector and rising prices.
Bitcoin Peaks Signal Incoming Altcoin Rally
Analyst Cyclop, sharing insights on social media platform X (formerly Twitter), posits that the prevailing belief among investors is that “this cycle is different.” However, Cyclop argues that the dynamics of the cryptocurrency market remain consistent with past cycles.
The analyst notes that the lack of previous altcoin rallies can be attributed to Bitcoin not having reached its all-time high until now. With Bitcoin achieving this milestone, Cyclop believes that both retail interest and altcoin indexes are still positioned at the bottom of their cycles, signaling that an altcoin season is on the horizon.
Historically, previous cycles have shown a pattern of BTC reaching its peak before altcoins follow suit. Cyclop highlights significant past peaks: $1,242 in November 2013, $19,000 in December 2017, and $69,000 in November 2021.
He suggests that the current cycle still has four to five months to unfold, much like before. Cyclop emphasizes that altcoins lagged behind simply because Bitcoin had not yet topped out, a situation which he believes is now changing.
Market Metrics Indicate Shift Toward Alts
During his analysis, Cyclop pointed out a common adage in the market: “Assets top when they look absolutely best.” As Bitcoin has now seemingly fulfilled about 90% of that sentiment, altcoins are expected to rise, especially since they currently appear less favorable in comparison.
Supporting this bullish thesis, Cyclop notes that metrics such as Bitcoin dominance (BTC.D) are at supply levels and that the ETH/BTC ratio is at demand levels. He recalls that similar patterns in the past have triggered altcoin seasons.
The current market indicators show a growing interest from retail investors, as evidenced by increasing stablecoin inflows and rising Google Trends related to cryptocurrency. Although these metrics are still below all-time highs, they indicate a shift towards a more risk-on investment strategy among retail traders.
Moreover, as mass adoption of cryptocurrencies continues, more companies are beginning to invest not only in Bitcoin and Ethereum but also in high-cap altcoins.
Cyclop outlines the typical progression of capital flows in altcoin markets, where high-cap coins tend to pump first, followed by mid-cap and then low-cap currencies.
The recent decline in Bitcoin dominance coupled with the rise of both BTC and ETH signals a potential shift in market dynamics, further reinforcing the case for an upcoming altcoin season.
When writing, Bitcoin retraced back to the $109,685 mark after almost reaching the $112,000.
Featured image from DALL-E, chart from TradingView.com
