In the face of recent geopolitical developments that caused a significant dip, Bitcoin (BTC) and Ethereum (ETH) have demonstrated a notable comeback this week. Despite Bitcoin proving to be more resilient than Ethereum, both digital assets have bounced back remarkably as the geopolitical crisis seemed to subside.
A recent weekly analysis by Binance, the world’s leading cryptocurrency exchange, revealed a marginal drop in Bitcoin’s dominance during this recovery period. Nevertheless, this doesn’t necessarily suggest that an altcoin season is imminent.
Binance’s report indicates that Bitcoin’s robust recovery signals a potential shift towards riskier assets as the macroeconomic environment shows signs of improvement. After a widespread shakeup caused by geopolitical tensions, both traditional and BTC assets ended the week on a positive note. Bitcoin, in particular, reaffirmed its position as an emergent hedge asset amidst geopolitical uncertainty, bouncing back to $107,000 from a low of $98,000 at the week’s start.
Similarly, Ethereum traced a comparable route, showing more downside volatility and a less pronounced recovery. Ethereum’s performance suggests it’s yet to establish itself securely as a hedge asset, closing the week below its opening price at $2,480 after dipping to $2,130 on Monday.
However, as both digital assets strive to maintain above specific support zones, the hope for an altcoin season in this cycle seems to be waning. Investors are increasingly questioning when this altcoin season will commence.
Historical data shows that altcoin seasons usually follow strong Bitcoin rallies, becoming more distinct when the leading asset enters a consolidation phase. During these periods, capital typically shifts from Bitcoin to more volatile, small-cap altcoins with a higher speculative appeal.
Binance analysts, however, argue that in this cycle, the overflow of new projects in the market may dilute any fresh capital inflow into altcoins. Therefore, a significant catalyst is necessary to trigger an altcoin season as capital rotation and industry narratives alone are no longer sufficient.
