Bitcoin Stabilizes Near $96,000, Altcoins May Rally 12%

Bitcoin has stabilized near the $96,000 mark, with the TOTAL2 metric recovering to $1.04 trillion in early May. This recovery suggests potential upside for altcoins, as historical patterns often see altcoins following Bitcoin's lead. The TOTAL2's Fibonacci levels indicate that if the current upward momentum sustains and breaks above the $1.04 trillion resistance, altcoins may rally significantly. The 1.618 Fibonacci extension level sits around $1.12 trillion, the 2.618 level around $1.18 trillion, and the 4.236 level around $1.26 trillion. These levels could act as significant resistance points where profit-taking might occur.

However, the altcoin season hopes are tempered by a meme coin frenzy. Santiment's market analysis observed that while some profits are rotating into altcoins following Bitcoin’s recent move, there is a significant spike in social media discussions around meme coins. This indicates that much of the current speculative interest is focused on high-risk, possibly high-reward meme assets rather than established utility projects. Santiment cautioned that increased social media chatter using terms like “altseason” can sometimes act as a contrarian indicator, suggesting that the current hype might not translate into sustained gains for utility-focused altcoins.

On-chain data from analytics firm Glassnode shows persistent Bitcoin accumulation by long-term holders, with over 254,000 Bitcoin aging beyond 155 days since the recent low. Many of these holders bought above $95,000, signaling renewed confidence and a lack of interest in de-risking at current prices. Historically, these long-term investors tend to increase selling near the $99,900 price point, suggesting that $99.9k could act as a significant resistance level. Breaking above it might open the door for price discovery above the key $100,000 mark.

Reinforcing potentially bullish sentiment around government adoption, U.S. Senator Cynthia Lummis stated on May 2nd that President Donald Trump supports her proposed “BITCOIN Act.” This legislation outlines a plan for the U.S. government to build a strategic reserve of 1 million Bitcoin over five years, positioning the U.S. as the single largest Bitcoin holder alongside ongoing accumulation by long-term holders. This move is seen as a path for the U.S. to address its $36 trillion debt and recognize the potential of Bitcoin as a strategic asset.