As Ether approaches the $3,000 mark, there is increasing speculation about the possibility of an “altseason,” but some analysts are cautioning that it may not happen as quickly as anticipated.
On February 19, Ether (ETH) reached an intraday high of $2,980, its highest level in 22 months. The last time the asset traded above $3,000 was in April 2022.
Many observers believe that this price movement indicates the start of an “ETH bull market,” with some even claiming that altseason has already returned to the crypto market. Henrik Andersson, the chief investment officer at Apollo Capital, agrees and points to upcoming Ethereum fundamentals, such as the Dencun upgrade and the mainnet launches for scaling solution Blast and restaking platform EigenLayer, as powerful catalysts for an altcoin rally.
Yuga Cohler, a senior engineering manager at Coinbase, also shares this sentiment, stating that we are entering an ETH bull market, which is positive for altcoins. Additionally, economist and trader Mikybull Crypto predicts a bullish March for ETH and sees $3,000 as a realistic target, emphasizing that this altseason will be significant.
However, Markus Thielen, head of 10x Research, believes that there is insufficient evidence to support the idea of an altcoin season on the horizon. He argues that sustained reductions in Bitcoin dominance below 45% are necessary to kickstart a viable altcoin season. Thielen also points out that recent altcoin rallies have quickly lost momentum, suggesting a higher risk-adjusted potential for Bitcoin investments.
Furthermore, Thielen suggests that Ethereum’s current momentum is driven more by the potential approvals of ETFs in May rather than increased on-chain activity within decentralized applications. He concludes that the focus should be on Bitcoin investments due to the higher risk-adjusted potential.
In a report on February 20, blockchain analytics firm Santiment stated that most crypto projects have generated profits for the average wallet on a mid to long-term timescale, except for a few lagging altcoins. However, they caution that their model is showing overbought signals, as indicated by the market value to realized value (MVRV) metric. This metric reveals a higher-than-average risk in buying or opening new positions during a surge that has lasted for more than four months.
Overall, while there is excitement about the potential altseason and the rise of Ether, analysts urge caution and emphasize the importance of considering risk-adjusted potential and market indicators before making investment decisions.