Altcoins Show Bullish Sentiment Despite Double-Digit Losses

Altcoins are currently exhibiting a strong bullish sentiment, with over 70% of traders leaning long. This trend suggests that the market may be preparing for a significant move, either a squeeze or a slide. Bitcoin, which recently approached its all-time high of $105k, has created a sense of uncertainty among traders. Historically, such indecision has led to capital rotations into altcoins, seeking short-term gains outside of Bitcoin's influence. However, many altcoins are still experiencing double-digit weekly losses, indicating that an altseason may not be imminent.

Despite the subdued spot prices, the perpetual market is showing signs of anticipation. High-cap assets on Binance have an average of 60% of traders leaning long, suggesting a strategic risk-taking approach rather than random optimism. This long bias is likely a bet on a near-term market rebalancing and a potential short squeeze. The chart tracking the Long/Short Ratio shows a cluster of altcoins sitting well above 1.0, indicating a heavy long bias beneath the surface. This is a bold move given the recent volatility, as a breakdown in Bitcoin toward $100k could open the door for late-arriving shorts to press the downside. However, if the market holds steady, those late shorts could face a significant squeeze, which is what the bulls seem to be betting on with their long exposure across alts.

Given the current circumstances, the market is at a critical juncture. The outcome will depend on which side plays their strategy more effectively. Bitcoin dominance is back above 65%, indicating that altcoins are still following BTC's lead. If Bitcoin heads back down to $100k, altcoins are likely to follow suit. The last drawdown demonstrated this, as Ethereum posted a sharper correction than Bitcoin due to elevated long exposure across altcoins. However, a recent structural shift in the current cycle makes a full retrace of Bitcoin to $100k less probable. If Bitcoin stabilizes, altcoins could stage a relief rally and potentially lead the rebound, especially if a short squeeze accelerates upside momentum. This "dip" could be a strategic entry point for those looking to catch the next move early.