Analysts are turning their attention to altcoins as Bitcoin (BTC) sees a price decline, sparking speculation about a possible altcoin season. This phase often follows Bitcoin halvings and has been anticipated since the fourth halving in April.
An altcoin season is a period when alternative cryptocurrencies outperform Bitcoin and Ethereum (ETH), potentially offering higher returns.
Analysts Discuss Altcoin Accumulation Phase
Mags, a well-known crypto analyst, notes that altcoins are currently trading at 60% to 80% of their previous highs. He points out that the Total2, which tracks the market cap of the top-125 cryptocurrencies excluding Bitcoin, remains above an upward trendline.
If this trendline holds, Mags believes it could mark the start of the “largest altcoin season ever.” A steady Total2 above the trendline indicates a positive trend and momentum for altcoins.
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Total2 Chart. Source: X/Twitter
Another analyst, Mustache, observes that altcoins have been following a Wyckoff accumulation pattern for several years. He suggests that they are currently consolidating before a potential price increase, with the price action tightening within a descending broadening wedge pattern.
Mustache emphasizes that this activity is evident on higher timeframes, though lower timeframes show a weaker market outlook.
Read more: 10 Best Altcoin Exchanges In 2024
Altcoins Consolidate within Wyckoff Pattern, Source: Mustache on X
The Wyckoff Accumulation Pattern is a technical chart formation used to identify potential buying opportunities after a downtrend. During this phase, the asset’s price stabilizes within a range as buyers and sellers compete.
This pattern indicates that institutional investors are accumulating assets at lower prices, while selling pressure diminishes, potentially setting the stage for a price increase as demand rises and selling wanes.
Current Bear Market Adjusts Post-Halving Anomaly
CryptoEstigma, another analyst on X, suggests that the current bear market is a correction following an unusual event after the fourth Bitcoin halving. Unlike previous cycles, altcoins rallied earlier this time, disrupting the usual trend and leading to the current market correction.
“The halving effect hadn’t yet fully manifested, yet altcoins surged significantly,” CryptoEstigma explained.
Meanwhile, the crypto market is also influenced by US economic factors like Federal Reserve decisions, geopolitical tensions, and recession fears, adding to the volatility. While some analysts anticipate an altcoin season, others, like Duo Nine, caution against over-investing in altcoins, noting rising Bitcoin dominance and negative Ethereum ETF flows.
Read more: 11 Cryptos To Add To Your Portfolio Before Altcoin Season
Additionally, some analysts are preparing for various scenarios by rebalancing their portfolios to optimize returns. However, there’s concern that if an altcoin season does occur, it may not be as significant as in 2017 or 2020.
“Nowadays, anyone can launch an altcoin, diluting the market. If an altseason happens again, it will likely be less impactful compared to 2017 or 2020. Bitcoin continues to gain market share,” said venture capitalist Jeff Kirdeikis.
