The Bitcoin bull market is "surging", can we who missed out on the opportunity still wait for the altcoin season?
Today, Bitcoin exceeded US$68,686, hitting a record high of only US$314. At the same time, assets such as NFT and inscriptions in the Bitcoin ecosystem also experienced considerable gains.
Bitcoin has risen, but the community does not seem to be very happy, because many people do not have Bitcoin in their hands, but altcoins that have not risen but fallen.
Most people are in vain
Wall Street funds continue to pour into Bitcoin, but most retail investors no longer have enough funds to get into Bitcoin.
A few years ago, everyone spent money to participate in the Inscription of various ecosystems of Bitcoin and Ethereum, and now they are still eagerly looking forward to the third spring of Inscription. As the concept of staking becomes popular, most of the chips in the hands of retail investors are passively locked and deposited in projects such as EigenLayer, Blast, and Merlin. But I have to say that if it weren’t for these lock-up projects, I might not be able to hold Ethereum or Bitcoin.
There are still some people who think that after the Bitcoin spot ETF is priced in, the news is not good, so they sell their chips to ambush the next good news. Perhaps we have all underestimated the power of the Bitcoin spot ETF.
Faced with the crazy rise of Bitcoin since the Spring Festival in February, many people did not even have time to react to Bitcoins sudden 10% increase. There are also some people who have been restricted by past bull market experiences and are afraid of heights and are waiting for a major correction.
To say this is a bull market, there is no doubt that the price of Bitcoin is the best proof, but this bull market is different from the past. Faced with the unilateral market trend of Bitcoin, the market is divided on whether there will be a bull market for altcoins.
Why is only Bitcoin rising?
On February 29, the single-day trading volume of the Bitcoin spot ETF reached US$7.69 billion, setting a new historical record since its release. In the following days, the overall volume remained at a level of 4 billion-5 billion. The Bitcoin spot ETF has seen strong inflows in trading volume in less than two weeks, pushing the price of Bitcoin closer to an all-time high.
As prices continue to climb, many are looking for reasons, and the clearest answer is an imbalance between supply and demand. Strong demand for Bitcoin spot ETFs exceeds the amount of Bitcoin produced by miners.
Alternative data shows that today’s cryptocurrency panic and greed index is 90 (yesterday was 82), reaching 90 for the first time since February 2021, and the market has fallen into extreme greed. Market sentiment is hot, but in stark contrast altcoin prices are depressed.
The worrying thing is that the price of Bitcoin has been rising, but the price of altcoins has remained motionless or even falling. Many people believe that the funds flowing into the Bitcoin spot ETF will not flow to the altcoins on the market, but will be cashed into US dollars, so there will be no altcoin bull market in this round.
In an interview with BlockBeats, Matrixport analyst Markus believes that the current market may only be a Bitcoin bull market and does not involve altcoins. But Markus said investors who buy ETFs don’t think so. “This bull market is very different. The last bull market was DeFi summer, and altcoins were the protagonists, but this time it is more or less concentrated on Bitcoin.”
In the last cycle, the cryptocurrency bull market occurred when Bitcoins market share was less than 48%, and altcoins rose wildly; but currently Bitcoins market share is 50.19%. Markus also mentioned that Bitcoin’s market dominance is approximately 52% and believes that if altcoins are to rebound, Bitcoin’s dominance must drop below 50%.
If 75% of the top 50 coins outperform Bitcoin for 90 days, it’s altcoin season. According to BlockchainCenter data, the current altcoin index is 73. The altcoin season has not yet come, but it is already relatively close to the standard of 75.
Altcoin Seasonal Index; Source:BlockchainCenter
Although many voices currently believe that this round may be a bull market for Bitcoin and that it is rare to encounter a violent copycat season, there are still some things worth looking forward to in the ecosystem such as Ethereum and Solana.
Can there still be a copycat season?
Although the SEC delayed its decision on BlackRocks Ethereum spot ETF application last night, Ethereum still exceeded $3,700. According to 8marketcap data, Ethereum has a market value of US$449 billion, surpassing companies such as Mastercard and ExxonMobil, ranking 23rd in asset market value.
This year’s largest narrative re-pledge of Ethereum has only progressed to the first half. On February 22, a16z invested US$100 million in the liquidity re-pledge protocol EigenLayer, and leading projects on the re-pledge track such as ether.fi and Renzo have also successively Obtain financing. In terms of infrastructure, in addition to replenishing pledges, modularization is still favored by leading VCs. Founders Fund and Dragonfly led the US$27 million seed round financing of Polygon modular blockchain Avail, and Jump Capital led the investment in modular blockchain Lava Network 1500. US$10,000 in seed round financing.
In previous cycles, the number of financings in the crypto space has closely followed the price of Bitcoin, but this time there is no related trend. According to encryption researchersIgnasAnalysts, projects often raise funds during bear markets and then choose to announce investments when it makes more sense for them. But the current market is so hot that the announced amount is still relatively low. This shows that there will be better opportunities to announce financing news in the future, and therefore is more optimistic about the market outlook.
The price of SOL has not performed poorly in this strong Bitcoin market. In addition to Ethereum, the market is also optimistic about the subsequent performance of Solana.
Firedancer, Solana’s second node validator developed by Jump Crypto, will be launched in 2024, which will help Solana process more transactions at once, with the goal of reaching one million transactions per second, which may make Solana more efficient than many traditional payments. Systems (such as Visa) are faster. Projects such as AI and Depin on Solana are also its competitive sectors. Under the catalysis of the points incentive system, a number of Solana ecological projects will be launched and tokens will be released.
During the writing period, the prices of Ethereum-based tokens such as ENS, OP, and STRK broke through and increased, and optimism further increased. Bitcoin has not yet broken through its previous high, and the future is still worth looking forward to.
