Analysis has shown that for an altcoin bull market to occur, the prices of both Bitcoin and Ethereum must rise.
What I learned: Arthur Hayes, a cryptocurrency influencer known as an investment expert and co-founder of BitMEX, analyzed on his blog on the 12th (local time) that “the altcoin bull market will begin when the prices of Bitcoin and Ethereum break $70,000 and $4,000, respectively.”
“I think that a significant increase in dollar liquidity by the end of the year, combined with the subsequent rally in Bitcoin and Ethereum, will create a strong foundation for the altcoin party to return,” he added.
What is an altcoin bull market?: An altcoin bull market, also commonly called an alt season, is literally a period when altcoin prices rise at a rapid pace that is difficult to explain. According to Blockchain Center, an altcoin season is called when the average price of at least 75% of the top 50 cryptocurrencies excluding Bitcoin exceeds the Bitcoin price increase rate over the past three months. According to Blockchain Center's Alt Season Index, it must be over 75.
Solid Bitcoin Dominance: For altcoins to rally, their prices must outpace Bitcoin. This can be seen through ‘Bitcoin Dominance’, which quantifies Bitcoin’s dominance in the overall cryptocurrency market cap.
However, the recent Bitcoin dominance is around 57%, so it is somewhat difficult to expect an altcoin bull market, whether looking at indicator trends or absolute dominance levels. According to historical price trends, it seems that altcoins will rise within a limited range only after Bitcoin begins to show upward momentum.
$300 Billion in Treasury Bonds to Be Issued by Year-End?: Arthur Hayes’ core argument is based on the assumption that $301 billion worth of US Treasury bonds will be issued by year-end ahead of the US presidential election in November. US Treasury Secretary Janet Yellen actually revealed this plan in her recent second-half bond issuance plan.
Hayes predicted that Secretary Yellen would use the money from the Treasury to sell bonds to inject liquidity into the market ahead of the presidential election to support the stock market. Some of the excess liquidity that would result would likely flow into the cryptocurrency market as well. That’s why he suggested $100,000 as the next price target for Bitcoin.
Hayes also predicted that Solana (SOL), which has recently been in the spotlight for its strong price gains in the post-drop rebound, will rise above $250, but will not show a strong rally like Bitcoin or Ether given their relative market caps.
