As Ether, the native cryptocurrency of the Ethereum blockchain, inches closer to the $3,000 mark, discussions surrounding a potential resurgence of altseason have intensified within the crypto community.
However, while social media buzzes with optimism, analysts remain divided on the likelihood and timing of such an event.
Ether’s rally sparks Altseason speculation
In recent weeks, Ether has witnessed a notable uptrend, reaching an intraday high of $2,980 marking its highest level in 22 months.
This surge has led many observers to speculate that an “ETH bull market” is imminent, with some even declaring the return of altseason to the cryptocurrency market.
Henrik Andersson, Chief Investment Officer at Apollo Capital, attributes this potential rally to upcoming Ethereum fundamentals, including the DenCun upgrade and the launch of scaling solution Blast and restaking platform EigenLayer.
He suggests that Ethereum’s underperformance compared to Bitcoin over the past year may also contribute to its potential for catching up.
Analysts divided on Altseason’s arrival
Despite the growing optimism, analysts like Markus Thielen, Head of 10x Research, urge caution, highlighting a lack of substantial evidence supporting the onset of altseason.
Thielen argues that sustained reductions in Bitcoin dominance below 45% are necessary to kickstart a viable altcoin season, a condition not yet met.
He points out that recent altcoin rallies have quickly fizzled out, emphasizing a higher risk-adjusted potential favoring Bitcoin investments.
Moreover, Thielen suggests that Ethereum’s current momentum may be driven more by anticipation of potential ETF approvals in May rather than increased on-chain activity within decentralized applications.
Market Sentiment and cautionary Signals
Blockchain analytics firm Santiment offers further insights, reporting that the majority of crypto projects have generated profits for the average wallet on a mid to long-term timescale since crypto markets began moving in October.
However, they caution that their model indicates overbought signals, citing the market value to realized value (MVRV) metric, which suggests a higher risk than average in buying or opening new positions during a prolonged surge.
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