Altcoin season approaching? Expert Views Amid Bitcoin Halving Aftermath

Can altcoins rebound? Analysis of expert predictions and key indicators following the recent Bitcoin halving.

In the wake of Bitcoin (BTC) recent reduce by half event, the crypto market has been anything but predictable.

While many expected the value of Bitcoin to rise, the reality was a little more muted. In fact, the market remains relatively stable, lingering below the record highs recorded in March 2024. Throughout this period of anticipation and adjustment, altcoins took a hit.

Investors appear to have favored Bitcoin over its alternatives, causing a notable hemorrhage in the altcoin market. Since March, the combined market capitalization of altcoins has seen a sharp decline, from a high of $1.27 trillion to a low of $908 billion on April 13.

Altcoin Market Cap Chart | Source: Commercial view

Although there has been a slight recovery since then, with market capitalization back up to around $1.06 trillion as of April 23, the path to stability remains uncertain.

The last month has been particularly difficult for many altcoins. Around 80% of the top 100 altcoins saw declines ranging from 2% to 50%.

Even Ethereum (ETH), the leading altcoin by market capitalization, was not immune to this slowdown. Although it reached a high of $3,727 on April 8, its value steadily declined in the days that followed.

As of April 23, Ethereum was trading at around $3,200, reflecting the downward trend in the altcoin market.

While Bitcoin’s dominance remains strong, where could altcoins potentially find a place in the market? Let’s find out.

Are we in an altcoin season?

In bull market cycles, Bitcoin typically leads the charge, attracting mainstream attention and investment.

Following the rise of Bitcoin, a phenomenon known as “altcoin season” often occurs, where capital flows into altcoins. This trend has been seen during previous bull markets, such as 2017-2018 and 2020-2021, where altcoins sometimes outperformed Bitcoin.

Over the course of an altcoin season, Bitcoin’s market dominance tends to decline as altcoins collectively gain greater share. However, the current market situation does not reflect this trend.

Where could altcoins go and what factors could trigger them?

Analyzing data from past cycles, we see that altcoin seasons historically begin shortly after the Bitcoin halving event.

The Altcoin Season Index is a crucial metric to watch for signs of an impending altcoin rally. This index provides insight into the relative strength of altcoins compared to Bitcoin.

Although the recent Bitcoin halving event initially caused the index to decline, indicating a period of Bitcoin dominance, it is essential to note that altcoins have seen a steeper decline in value during this period .

When the Altcoin Seasonal Index exceeds a certain threshold, usually above 75, it suggests an increased likelihood of an altcoin rally.

According to the latest data, the Altcoin Season Index stands at 39, indicating that an altcoin season might still be far away.

Another critical indicator is Tether (USDT) Dominance, which tracks the market share of the stablecoin USDT compared to other cryptocurrencies.

A downward trend in USDT dominance suggests that investors are increasingly willing to take risks by trading stablecoins for crypto assets, potentially signaling the start of an altcoin season. Current analysis of the USDT dominance chart shows that setting new lows correlates with early signs of altcoin rallies.

USDT Dominance Chart | Source: Commercial view

Conversely, a shift toward an upward trend in USDT dominance would indicate a preference for stablecoins over altcoins, potentially delaying the start of an altcoin season.

Timing is also crucial to consider. Although altcoin rallies can occur at any time, they often coincide with specific market conditions, such as several weeks or months after Bitcoin halving events.

This delay can be attributed to the time needed for market participants to digest the implications of the Bitcoin halving and reallocate their investments accordingly.

To assess whether altcoins are accelerating, you should pay close attention to an increase in trading volume accompanied by sustained price appreciation across multiple altcoins.

What do the experts think?

Emperor, a veteran crypto analyst, observes that Bitcoin’s dominance before the halving was on the rise, approaching its peak support level established after the halving in 2020.

As May approaches, Emperor predicts a potential major altcoin rally, especially if Bitcoin maintains its stability.

Emperor suggests a speculative scenario in which Bitcoin could recover to around $68,000 or even hit its all-time high, attracting top buyers looking to exit at profitable levels.

Meanwhile, altcoins, especially those that have shown strength in recent months, could see a rally.

Michaël van de Poppe, another respected crypto analyst, echoes the sentiment that post-halving market sentiments are shifting towards altcoins.

He notes that as Bitcoin’s dominance wanes, indicating a market rotation, altcoin time is on the horizon.

Michaël also suggested the role of Ethereum (ETH), which is evolving into a more robust settlement layer within the crypto ecosystem that could impact the altcoin’s performance in the coming months.

Therefore, you should closely monitor key indicators, such as Bitcoin dominance, and monitor altcoins to make informed decisions regarding your crypto portfolios. Always remember the golden rule of investing: never invest more than you can afford to lose.

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