“Is the Altseason Upon Us? Ether Rally Sparks Hope for Web 3.0 Projects and Blockchain Upgrades”

The Rise of Web 3.0: Is an “Altseason” on the Horizon?

The demand for a potential “altseason” is growing as Ether (ETH) approaches the $3,000 mark, but experts warn that it may not happen as quickly as some hope.

On February 19, Ether reached an intraday high of $2,980, its highest level in 22 months. The last time the asset was above $3,000 was in April 2022.

This surge in price has led many to believe that an “ETH bull market” is imminent, with some even declaring that the “altseason” has already returned to the crypto market.

“I believe there are multiple powerful catalysts on the horizon that could potentially spark an altcoin rally,” stated Henrik Andersson, Chief Investment Officer at Apollo Capital, in an interview with Cointelegraph.

Andersson pointed to upcoming Ethereum developments, such as the Dencon upgrade and the launch of mainnets for scaling solution Blast and restaking platform EigenLayer, as key drivers for an “ETH bull market.” He added, “This will also have a positive impact on altcoins.”

“We are entering a bullish phase for ETH, which is a good sign for altcoins,” agreed Yuga Cohler, Senior Engineering Manager at Coinbase, on Twitter.

Meanwhile, economist and trader Mikybull Crypto, with a following of 60,000 on Twitter, predicts that March is typically a bullish month for ETH and that $3,000 is within reach. He also believes that this “altseason” will be significant.

Technical analyst and trader Titan of Crypto shared a chart on Twitter showing the total market capitalization of altcoins without BTC and ETH, which appears to be breaking out.

Slow and Steady

According to Markus Thielen, the head of 10x Research, there is currently not enough evidence to suggest an upcoming altcoin season.

Thielen believes that in order for a successful altcoin season to begin, Bitcoin’s dominance must decrease and remain below 45% for an extended period of time.

He also notes that recent altcoin rallies have quickly lost momentum, making Bitcoin a more favorable investment option with lower risk potential.

Additionally, Thielen points out that Ethereum’s recent surge is largely driven by the potential approval of ETFs in May, rather than an increase in on-chain activity within decentralized applications (dApps).

On February 20th, blockchain analytics firm Santiment reported that the majority of crypto projects have generated profits since the market started moving in October, except for a few lagging altcoins.

However, they caution that their model is showing overbought signals, specifically citing the market value to realized value (MVRV) metric, which indicates a higher risk than average when buying or opening new positions during a 4+ month surge.

MVRV is calculated by dividing the total market cap by the realized cap and is commonly used to identify local market tops and bottoms.