This week, Bitcoin’s price held strong at $65k, successfully resetting a crucial altcoin season indicator to a “neutral” position, which increases the likelihood of continued recovery. Blockchain analytics firm Swissblock reports that the Alts Impulse signal has shifted from negative to neutral, indicating that a further move to “positive” could spark a short-term altcoin season. “Should we witness a sharp spike in positive impulse—triggering a decisive bullish crossover—it would provide a precise signal for an upward move in the short term.”
The signal turned negative in February, but has shown signs of easing over the past few days. This development sparked optimism for immediate respite in the altcoin market, which has been experiencing significant losses after Bitcoin’s prolonged drop into the sub-$60K territory. Thus, the inquiry arises – Are there additional data sets that correspond with a possible altcoin rally? The Stablecoin Exchange Inflow, a key indicator of buying power, has been on the rise since January. The figure surged to $4 billion in February, highlighting the increased capital influx into the market, which bolstered the relief bounce observed earlier in the month. Since 10 February, the metric has experienced a slight decline, dropping from $4.3 billion to $3.7 billion. This decline was not as pronounced when juxtaposed with the recovery observed since the start of the year. Thus, the metric’s ongoing recovery may bolster the anticipated altcoin rally.
However, a prolonged downturn would indicate restricted capital inflows, maintaining the overall market’s vulnerability. The ETH/BTC ratio, a crucial indicator for tracking altcoin seasons, has seen a recovery of 3.5% in recent days. It indicated that ETH outperformed BTC – A trend that has consistently characterized altcoin market recoveries. If the ratio breaks out to the upside from its February range, we could be looking at a potentially strong altcoin season ahead. Zcash has emerged as the frontrunner in the latest market surge, boasting a remarkable 24% increase in value within the last 24 hours, positioning itself prominently among the top 20 crypto assets by market cap. Hedera Hashgraph and Bitcoin Cash both experienced a notable 10% recovery, while Solana recorded an 8% increase during the same timeframe. Ethereum saw 6% gains and reclaimed $2k. The broader altcoin market recovery appears poised to extend, as indicated by the Alt Impulse signal. However, any reversal in Bitcoin’s price could dampen the enthusiasm.
Source reports that there appears to be significant hedging and positioning in anticipation of a downward movement. The bearish positioning surged by almost 12% in the last month – Indicating that the sideways structure above $60k was drawing some doubt. Should BTC experience a decline, the altcoin market is expected to mirror that movement. The altcoin market has transitioned to a “neutral” stance following a period of negative momentum, sparking optimism for a potential short-term rally. Nonetheless, the optimistic perspective may be compromised if BTC experiences a downturn or if capital inflows into the market come to a standstill.