Altcoin market momentum recovers to ‘neutral’ – Is an altseason next?

Bitcoin’s price defended $65k this week, effectively helping reset a key altcoin season signal to a “neutral” level, raising odds of further recovery.

According to blockchain analytics firm Swissblock, the Alts Impulse signal turned from negative to neutral, and a subsequent move to “positive” could trigger 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 flipped negative in February, but eased over the past few days. This raised hopes for short-term relief for the altcoin market after extensive bleeding following BTC’s extended plunge into the sub-$60K range. 

Hence, the question – Do other data sets align with a potential altcoin surge? 

Stablecoin inflows suggest…

The Stablecoin Exchange Inflow, which tracks buying firepower, has been rising since January.

It rose to $4 billion in February, underscoring that more capital was deployed into the market, supporting the relief bounce seen earlier in the month. Since 10 February, however, the metric has fallen slightly from $4.3 billion to $3.7 billion.  

This was not a sharp drop compared to the recovery seen from the beginning of the year. Hence, the metric’s sustained recovery could support the expected altcoin surge. However, an extended dip would mean limited capital inflows, keeping the overall market fragile. 

That said, the ETH/BTC ratio, another key altcoin season tracker, recovered by 3.5% over the last few days. It suggested that ETH outperformed BTC – A pattern that has always marked altcoin market recoveries. 

Should the ratio break out to the upside from its February range, a relatively strong altcoin season could be on the cards. 

So far, among the top 20 crypto assets by market cap, Zcash [ZEC] has led the most recent rally, gaining by 24% over the past 24 hours. 

Hedera Hashgraph [HBAR] and Bitcoin Cash [BCH] each saw a 10% recovery too, while Solana [SOL] gained 8% over the same period. Ethereum [ETH] saw 6% gains and reclaimed $2k. 

Will Bitcoin hedging spoil the altcoin party?

The broader altcoin market recovery could extend itself, as painted by the Alt Impulse signal. However, any Bitcoin price reversal could spoil the party. 

According to Glassnode, there seemed to be heavy hedging and positioning for a downside move. The bearish positioning increased by nearly 12% over the past month – A sign that the sideways structure above $60k was attracting some skepticism.

If BTC falls lower, the altcoin market will follow suit. 

Final Summary

• The altcoin market flipped to “neutral” after negative momentum a few days ago, raising hopes for a short-term surge. 
• However, the positive outlook could be derailed if BTC slips lower or capital inflows into the market stagnate.