Earlier today, Bitcoin hit a new all-time high of $70,184, but soon after, it saw a sharp decline. This shifted many people’s attention to altcoins, particularly memecoins and AI-themed cryptocurrencies, which have been outperforming Bitcoin in the past week. This surge in altcoin activity has sparked conversations on whether we’re entering an altcoin season (altseason).
As Bitcoin briefly soared above $70,000, the total crypto market capitalization crossed the $2.5 trillion mark, showcasing the current bullish momentum in the market. This figure has since climbed to $2.52 trillion. Similarly, altcoins have been showing strength, with their total market capitalization exceeding $1.1 trillion on the same day, according to data excluding Bitcoin’s market cap. Over the last three months, altcoins have seen their value increase by approximately 64%, from $697 billion to $1.14 trillion as of March 7, slightly outperforming Bitcoin’s 56% gain during the same period.
This growth in altcoins is attributed to the remarkable rally of memecoins and AI-themed cryptocurrencies. For example, Dogecoin and Shiba Inu have seen gains of 20% and 130% respectively in the last week. Other new tokens like Pepe, Bonk, and Dogwifhat have also experienced significant increases in their values.
Moreover, tokens within the AI ecosystem, such as Fetch.ai, Synesis One, SingularityNET, and Theta Network, have all reported double to triple-digit gains within the same timeframe. In contrast, Bitcoin has only increased by 8.5%.
Despite these impressive performances by altcoins, it may be too early to declare the start of an altseason. The altcoin season index, which measures whether 75% of the top 50 coins have outperformed Bitcoin over the last 90 days, shows that only 69% of these altcoins have done so. This indicates that while we are close, the criteria for an altseason have not been fully met.
However, a recent market report by K33 Research suggests that the situation could change soon. The report highlights that since November 2022, Bitcoin’s market cap has doubled compared to the value of all cryptocurrencies except BTC and Ether, mirroring the setup before the 2020 altcoin bull run. According to the report, “Judging by history, altcoins will start outperforming about the time we are now.”
CrediBULL, an independent analyst, has outlined two scenarios for the start of the altseason. The first involves a mega breakout of Bitcoin, after which altcoins do not gain much attention until Bitcoin pauses. The second scenario involves Bitcoin facing rejection or consolidation at its previous all-time high, which would lead altcoins to rally almost immediately. CrediBULL states, “The common theme here and the key takeaway is that after BTC hits prior ATH, alts begin rallying at the first major pause/consolidation of BTC, whether that at prior ATH or far above it.”
Michaël van de Poppe, founder and CEO of MN Trading Consultancy, however, believes that the altcoin season has not yet started, pointing out that altcoins still have “40-60% market capitalization” to reach before hitting their 2021 highs above $1.1 trillion.
Adding a unique perspective, Cardano founder Charles Hoskinson mentioned that the altcoin season will officially start once DOGE overtakes ADA in market capitalization, indicating a more playful marker for the beginning of the altseason.
