Bitcoin's Role in Altcoin Season Uncertain Amidst Historic Liquidation

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Wednesday, Feb 5, 2025 10:07 am ET1min read
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Analysts Divided on Bitcoin's Role in Potential February Altcoin Season Amidst Historic Liquidation Event

Crypto market faces uncertainty as analysts suggest a steep recovery may not see fruition until February or beyond, while traders caution against immediate gains. Some analysts predict a February altcoin rally based on historical patterns and Bitcoin's dominance.

Analysts Weigh In on the Crypto Market Recovery Timeline

COINOTAG reported on Monday’s historic $2 billion liquidation event, which raised questions about the pace and strength of potential recovery.

Even with some signs of recovery appearing post-event, analysts emphasize a cautious outlook. Mathew Hyland, a blockchain analyst, noted that while Bitcoin (BTC) maintains price integrity, altcoin markets experienced severe distress during the liquidation.

“Considering this was the largest liquidation event in Crypto history, it likely means the low is in. However, in 2020 & 2022, it took over two months for the full recovery to take place,” Hyland stated, providing context from previous cycles.

CryptoCon shared a similar view, labeling the incident as a profound shakeout that could steer the market over the coming months. He refrained from forecasting immediate recovery signs, instead arguing for a prudent investment approach amid current volatility.

Arguments for Altcoin Season in February

Contrary to the cautious outlook, optimism remains prevalent. Analysts like Merlijn The Trader and Coinvo note that altcoin trends typically see rallies beginning in February.

“Altcoin season starts in February! History doesn’t lie, and neither do the charts,” asserted Merlijn in a recent post.

This sentiment echoes across the analyst community, with Coinvo noting the cyclical nature of such market movements. Their observation correlates Bitcoin’s dominance levels nearing a peak to hopefully trigger increased altcoin performance.

In contrast, analyst DevKhabib highlighted February may favor Bitcoin’s performance, identifying the $91,000 mark as a critical level. The rebound above this threshold is crucial for sustaining market momentum.

“$91,000 seems to be a strong support for BTC as