Getting ready for next copycat season
Earlier today, Bitcoin hit an all-time high of $70,184, but soon after, it saw a sharp decline. This has turned the attention of many to altcoins, particularly meme coins and artificial intelligence-themed cryptocurrencies, which have outperformed Bitcoin over the past week. The surge in altcoin activity has sparked discussion about whether we are entering altseason.
As Bitcoin briefly surged above $70,000, the total cryptocurrency market capitalization exceeded the $2.5 trillion mark, demonstrating the current bullish momentum in the market. That number has since climbed to $2.52 trillion. Likewise, altcoins have also shown strength, with their combined market capitalization exceeding $1.1 trillion on the same day, according to data excluding Bitcoin’s market capitalization. Altcoins have grown in value by about 64% over the past three months as of March 7, from $697 billion to $1.14 trillion, slightly ahead of Bitcoin’s 56% gain over the same period.
The growth of altcoins has been attributed to a significant rebound in meme coins and artificial intelligence-themed cryptocurrencies. For example, Dogecoin and Shiba Inu gained 20% and 130% respectively last week. Other new coins such as Pepe, Bonk and Dogwifhat have also seen significant growth in value.
Additionally, tokens in the AI ecosystem, such as Fetch.ai, Synesis One, SingularityNET, and Theta Network, have all seen double to triple-digit growth in the same timeframe. By comparison, Bitcoin is up only 8.5%.
Despite the impressive performance of altcoins, it may be too early to declare the start of altcoin season. The Altcoin Season Index, which measures whether 75% of the top 50 altcoins have outperformed Bitcoin over the past 90 days, shows that only 69% of these altcoins have outperformed Bitcoin. This shows that while we're getting close, we haven't quite met the standards for copycat season yet.
However, a recent market report from K33 Research suggests that may soon change. The report highlights that since November 2022, Bitcoin’s market capitalization has doubled compared to the value of all cryptocurrencies except BTC and ETH, reflecting the situation before the 2020 altcoin bull run."Historically, altcoins will begin to outperform where we are now," the report said.
Independent analyst CrediBULL outlines two scenarios for the start of copycat season. The first one involved Bitcoin’s huge breakout, after which altcoins didn’t gain much traction until Bitcoin paused. The second scenario is that Bitcoin faces rejection or consolidation at its previous all-time highs, which would cause altcoins to rebound almost immediately. CrediBULL said, “The common theme and key takeaway here is that altcoins will start to rally on the first major pause/consolidation in BTC after BTC hits its previous ATH, whether it’s the previous ATH or well above it.”
However, MN Trading Consultancy founder and CEO Michaël van de Poppe believes that altcoin season has not yet begun, noting that altcoins still have “40-60% of market cap” to reach 2021 highs of over $1.1 trillion .
Cardano founder Charles Hoskinson made a unique point by mentioning that the altcoin season will officially begin once the DOGE market cap exceeds ADA, which provides a more interesting sign for the start of the altcoin season.
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