Is the “manic phase” of altcoin season about to begin?

Bitcoin (Bitcoin) the recent surge to the record $71,000, followed by a pullback, set the stage for what many in the cryptocurrency The industry believes it could signal the start of an altcoin season.

The next two weeks will be crucial for the entire altcoin sector. The U.S. House of Representatives prepares to vote on the Financial Innovation and Technology for the 21st Century Act (FIT21).

Additionally, the U.S. Securities and Exchange Commission (SEC) will vote on the Ethereum exchange traded fund (ETFs) later this week. Speculation about the likely approval of both the FIT21 bill and Ethereum spot ETFs has been rife, leading to increased activity in the sector cryptocurrency markets.

As of this writing, the global cryptocurrency market capitalization stands at $2.73 trillion, down 0.45% over the past 24 hours.

Market movements and trends

The cryptocurrency market started the week with strong bullish momentum, led by Ethereum (ET) recent surge to $3,800, which in turn brought notable gains across all major altcoins.

Historically, Bitcoin starts market cycles with a strong surge, but significant action typically takes place during consolidation phases, where other cryptocurrencies take the lead.

This trend is expected to become more pronounced in the coming period, driven by different forecasts from leading analysts

Analysts’ insights

Renowned crypto analyst Michaël van de Poppe noted that the altcoin market capitalization, called TOTAL2, has completed its recent correction.

Poppe suggested that the altcoin market capitalization is well positioned for a rally to retest its all-time high (ATH). Additionally, most altcoins, led by Ethereum, have broken out of a bullish flag pattern in recent days.

Another well-known analyst, Rekt Capital, noticed in a post on X (formerly Twitter) that the market capitalization of altcoins, excluding the top 10 cryptocurrencies, has successfully tested the $250 billion level as a support level in recent weeks.

Total market capitalization of cryptocurrencies excluding the top 10. Source: Rektcapital/X

According to his analysis, the market capitalization of altcoins is expected to rise to $315 billion before returning to the $250 billion mark. This retracement is expected to be followed by an explosive rally above the $440 billion market cap.

Investor sentiment

Leading analyst recommend investors do not panic and prepare for the imminent “manic phase”. Renowned crypto analyst Crypto Yoddha shared that the recent drop was “just a higher low in an uptrend.”

According to his analysis, the altcoin market is looking to retest the $1.27 trillion mark resistence level observed in March before aiming for the previous cycle’s all-time high of $1,700 billion. He anticipates a bullish continuation leading to a new all-time high in the market during the next phase.

Mixed signals

Despite these optimistic projections, the Blockchain Center’s seasonal altcoin index presents a mixed view.

According to this index:

“If 75% of the top 50 coins performed better than Bitcoin in the last season (90 days), it is Altcoin season.”

Currently, alone 37% of the top 50 altcoins have outperformed Bitcoin over the past 90 days, still insufficient to officially declare an altcoin season.

The cryptocurrency market is at a critical juncture, with major legislative decisions and market movements on the horizon.

While many analysts are optimistic about the potential start of a new altcoin season, mixed indicators suggest investors should proceed with caution.

The next few weeks will be crucial in determining the direction of the altcoin market, potentially leading to a “manic phase” or continued consolidation.

Disclaimer: The content of this site should not be considered investment advice. Investing is speculative. When you invest, your capital is at risk.

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