Is the Bitcoin Bull Run Over? Uncover the Altcoin Secrets as the Market Cools Off

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Bitcoin price experienced a flash crash from $100,000 to a low of $91,300 on February 3. Since the crash, Bitcoin has consolidated within the range of $95,500 to $99,000, while altcoins struggle to gain traction as BTC dominance hovers close to its four-year peak.

The Solana (SOL) ecosystem observed a steep correction in its market capitalization, dropping to $9.96 billion and erasing over 7% of its value in the last 24 hours, according to CoinGecko data. Factors such as the LIBRA and MELANIA meme coin controversy and alleged links to entities that pulled $100 million from the latter have negatively impacted meme coins in Solana. The altcoin market is currently facing the effects of declining sentiment and waning demand among traders.

Bitcoin flashcrash sets the tone for the first half of 2025

Bitcoin price rally to the $100,00 milestone and its all-time high of $109,588 kicked off the 2024 bull market. In 2025, BTC suffered a flash crash, with the largest cryptocurrency slipping to a low of $91,231 on February 3.

Bitcoin has consolidated within a tight range between $95,500 and $99,000 as trader sentiment declines. The crypto market’s reaction to U.S. macroeconomic developments and U.S. President Donald Trump’s executive orders and new appointments within the administration has induced volatility in Bitcoin and altcoin, according to derivatives market data.

Bitcoin volatility declined from its peak of 2.07% on February 6, with the last 30-day estimate putting it at 1.53%. A decline in volatility implies a lower likelihood of price swings in Bitcoin. Despite the short-term cooling off period in the crypto market, BTC is unlikely to have hit its cycle top.

Altcoins consolidate as Bitcoin dominance hits a four-year peak

The total crypto market capitalization excluding Bitcoin ranges around the $1.19 trillion mark, according to TradingView data. The metric dropped nearly 20% in February 2025 until Wednesday, February 19.

Altcoins continue consolidating as Bitcoin dominance hovers around its four-year peak, but traders should keep their eyes peeled for any change in the metric. If Bitcoin dominance drops, capital could rotate into altcoins and utility tokens, paving the way for an altcoin season.

Bitcoin reigns stagnant at the time of writing, with the 7-day volatility at eight-month lows, and 30-day volatility at October 2024 lows. The largest cryptocurrency is currently less volatile than 37% of the top 100 U.S. public companies. Such a low relative volatility is a rare occurrence and was last observed in October 2023.

Trading volume across exchanges is down to pre-election levels after significant de-leveraging, with altcoins likely gearing for recovery. Professional traders are risk-averse as the contango narrows and CME basis falls to September levels, according to insights from a K33 research report.

The short-term sentiment among traders is one of caution, and institutional holder exposure to crypto has slowed down. A key indicator to watch is the Altcoin Season Index on Blockchaincenter.

Altcoin season is a time period where the returns on 75% of the top 50 altcoins outperform Bitcoin consistently in a 90-day timeframe. To determine whether it is the altcoin season yet, traders use the altcoin season index.

On Wednesday, the index reads 45, on a scale of 0 to 100, meaning that it is not the altcoin season yet.

As altcoins consolidate, it may be the ideal time for sidelined buyers to begin accumulation before the next leg up. Tokens like Bittensor (TAO), Pyth Network (PYTH), Ethena (ENA), blue-chip meme coins like Dogecoin (DOGE) and Pepe (PEPE) are currently below the average traded prices and could begin their recovery once the altcoin rally resumes.

Best altcoins to buy now

The top three altcoins that are currently in the buy zone and could recover in the next leg of the altcoin rally are Bittensor, Pyth Network, and Dogecoin. The following price charts identify the buy zone, price target, gains, and the support/resistance levels for sidelined buyers to enter a trade this week.

PYTH has been in a multimonth downward trend that started in December 2024, during the Bitcoin bull run. The token has been in a decline, down to $0.2031 at the time of writing. Technical indicators on the daily timeframe, RSI and MACD, support a bullish thesis in PYTH, and the token could rally 25% to test a key resistance level within an imbalance zone, at $0.2548.

A Bitcoin flash crash or market consolidation could send PYTH to support at the February 8 low of $0.1739.

Bittensor’s TAO has several catalysts, like Dynamic TAO upgrade and the launch of subnet AI tokens, that could drive value higher in the coming weeks in February 2025. The token could break out of its downward trend and close above the $379 level, test resistance at $445.

$445 is the upper boundary of a Fair Value Gap on the daily timeframe, a key resistance level for TAO. A rally to $445 marks 16% gains in the token. TAO could find support at $341, the February 9 low for the AI token.

Dogecoin, the largest meme token in the crypto market, is currently ranging after a multi-month downward trend. A daily candlestick close above resistance at $0.30 could break the pattern and indicate a trend reversal in the token.

DOGE’s technical indicators on the daily chart are supportive of nearly 20% gains in the coming weeks, meaning the short-term outlook on the token is bullish. A correction could send DOGE to test support at $0.21659, as seen in the chart below.

Bitcoin price outlook

Derivatives data from a K33 research report shows that traders have taken a cautious hands-off approach on the Chicago Mercantile Exchange (CME) over the past few weeks. The sentiment among derivatives traders is bearish as premiums continue to push lower, while open interest remains stagnant amidst no significant spike in ETF activity.

Premiums have been on a clear downtrend in the months following the result of the U.S. Presidential election in November 2024. BTC’s initial post-Trump election rally pushed the asset above $100,000. However, as the market adjusts to announcements and macro developments, traders exhibit growing risk aversion.

Derivatives traders are less motivated to add long exposure to Bitcoin, activity levels overall remain shallow, and open interest stays flat throughout the week amidst weak futures ETF flows.

As Bitcoin consolidates and trades in a range-bound manner, the question of whether the bull run is over looms among market participants.

Expert commentary on Bitcoin

Nick Forster, Founder at Derive.xyz, says volatility forecasts a rise in BTC price. Forster told Crypto.news in an exclusive interview:

“Currently, BTC’s 7-day implied volatility (IV) is hovering around 40%, while 6-month volatility sits at 54%. While ETH‘s 7-day IV is significantly higher at 66%, matching its 6-month volatility.

“On the surface, this suggests a period of relative calm before larger price movements in Q3. However, the notable discrepancy between BTC and ETH volatility signals that BTC may be undervalued, considering its 2-year high in market dominance (60.7%), increasing momentum for BTC strategic reserves, like Texas’ symbolic plans, and major geopolitical developments such as the resolution of the Israeli/Palestinian conflict and progress in Ukraine peace talks.

“The chance of BTC hitting above $115K at the end of this quarter is down to 12% from 17% last week.”

At the time of writing, Bitcoin trades at $95,689.

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2025-02-19 18:48