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Altcoin Season Coming? Ethereum ETF Approval Could Benefit Non-BTC Tokens

Last Updated May 24, 2024 4:10 PM
Eddie Mitchell
Last Updated May 24, 2024 4:10 PM
Key Takeaways
  • Analysts predict ETH to reach $6,000 by the end of the year if BTC hits $100,000.
  • Spot ETH ETFs may not begin trading until August 2024.
  • Bitcoin’s dominance has slipped to 50.7%.

With the approval of spot Ethereum (ETH) exchange-traded funds (ETFs) in the U.S., a fresh wave of bullish sentiment has overcome the crypto markets.

Though they are yet to begin trading officially, one of crypto’s favorite questions has begun to emerge – Altcoin season when?

Altcoin Season When?

Ethereum has over 20,000 altcoins in its ecosystem, suggesting that an ETH ETF could have broader market implications than the Bitcoin (BTC) ETF launch.

So far, Ethereum ecosystem  tokens have been enjoying modest to heightened price gains, though it’s not quite the moon-mission gains we’re used to seeing during a ‘true’ altcoin season.

Network activity is however bustling, with Ethereum ecosystem 24-hour trading volumes up over 16% .

Ethereum ecosystem tokens and prices listed.
(Source: CoinMarketCap)

The Altcoin Season Index from analytics firm Blockchain Center , posits that if the top 50 cryptocurrencies outperform BTC over the last 90-day period, then it is altcoin season.

According to that index, we are not quite there yet. The methodology behind this index is relatively simple, and contentious.

Ethereum and Bitcoin Prices

Hype around BTC ETFs drew in plenty of fresh capital this year. Notably, BTC’s price rally ahead of the spot ETF approval on January 11, 2024, saw a brief correction to under $40,000 before pushing upward to a new all-time high of over $73,000.

As noted by popular analyst VirtualBacon, ETH may similarly retrace back to $3,000 as investors accumulate their positions.

The analyst also notes that there’ll be plenty of volatility in the coming weeks as they wait for spot Ethereum ETFs to begin trading.

He believes that if BTC pushes toward $100,000, then ETH could optimistically reach $6,000 by the end of the year. Further analysis into Bitcoin’s declining dominance  also hints at the beginnings of an altcoin season.

Buying Pressure

Ahead of the U.S. Securities and Exchange Commission’s (SEC’s) decision to approve ETH ETFs, Ethereum co-founder Joseph Lubin noted that these investment products would open a “floodgate” of demand for ETH tokens.

According to Lubin, there’s a lot of “pent-up pressure” to purchase ETH,”.

This is because Ethereum is at the core of so many decentralized finance (DeFi) systems, decentralized autonomous organizations (DAOs), and thousands of other projects. For him, this “could be a pretty profound watershed moment.”

It’s worth noting that spot ETH ETFs have yet to begin trading in the U.S., meaning that any tangible effects on market dynamics may not be seen for some weeks to come. However, cryptocurrency market analyst Dan Gambardello believes that altcoin season is just around the corner.

According to Gambardello’s analysis, ETH could be entering into a bull cycle within the coming days, kicking off altcoin season along with it, which would be some weeks ahead of other predictions.

Waiting in Anticipation

Just as the release of spot Bitcoin (BTC) ETFs saw an influx of liquidity and investments from retail and institutional players, ETH ETFs could also boost demand for ETH and drive up prices.

ETH markets will likely experience heightened liquidity, which brings increased trading volumes and activity. This can result in greater price stability for ETH and altcoins, just as Bitcoin ETFs have – so far – contributed to an overall reduction  in market volatility.

At present, ETH continues to trade sideways and hover around the $3,700  price tag. Bearish investors will likely want to see the price drop before ETH ETF trading officially opens.

This year has been pretty great for crypto. We’ve seen the approval of BTC ETFs in the States, the fourth Bitcoin Halving, Solana’s memecoin mania, Ethereum’s Dencun update, and even the return of Gamestop (GME) memestocks.

Crypto is beginning to feel like it is “back” for the first time in a while.

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