Bitcoin has officially surpassed the $118,000 mark, marking a new all-time high and shocking the global cryptocurrency investment community. This breakout is not only a sign of a strong recovery but also opens new prospects for the market. According to a prominent industry analyst, Virtual Bacon, this could be the start of a significant bull cycle; however, he also warns that the altcoin season – the time when cryptocurrencies other than Bitcoin break out – has yet to arrive.
Bitcoin is rallying strongly
In the past seven days, Bitcoin has recorded an impressive increase of 9.3%. Since the beginning of the month, the price of this cryptocurrency has risen nearly 10%, reaching a record high of $118,000. This is a clear sign of a new bull market forming, and Virtual Bacon believes that Bitcoin is the leading catalyst in the early stages of this growth.
According to him, Bitcoin is often the leading currency in bull cycles, and altcoins will follow as market liquidity changes.
"Bitcoin's breakout confirms the beginning of a new cycle."
Currently, Bitcoin's key support levels are:
50-week Simple Moving Average (SMA): $86,982
20-week SMA: $96,719 (the buying area when prices drop has been proven)
The Altcoin season is near but not confirmed
A noteworthy factor is that Bitcoin's dominance rate has slightly decreased from 65.5% on July 1 to 64.58%. While this is a positive signal for altcoins, the altcoin season has not been confirmed. According to Virtual Bacon, history shows that the altcoin season typically begins after Bitcoin's dominance rate decreases sustainably.
However, he also points out several positive signs:
Ethereum's price compared to Bitcoin has increased by 10.53% this month.
The ETH/BTC trading pair is currently trading at 0.025, up from 0.022, which is quite an impressive increase.
A strong weekly close above 0.024 could be a signal for a true breakout.
In particular, during the period from July 5 to 10, the ETH/BTC trading pair witnessed a strong increase of up to 9.49%, although there was a slight adjustment of 1.08% afterward. Nevertheless, the strength of coins like Ethereum and Solana is still not enough to confirm that the market has officially transitioned fully to altcoins.
The growth is supported by Fed policy
An important factor that cannot be overlooked in this rally is the monetary policy of the Federal Reserve, as they quietly pump liquidity into the market. Virtual Bacon has pointed out two important moves by the Fed recently:
Pumped $11 billion into the repo market on June 30.
Proposed reduction of the Supplementary Leverage Ratio (SLR) for large banks.
These actions help strengthen bank reserves and boost lending capacity, thereby enhancing liquidity across the entire financial system. Notably, the global liquidity index is creating higher lows. If this index surpasses the peaks of April and September 2024, it could confirm that liquidity is expanding – a crucial factor driving the altcoin season.
Moreover, the next FOMC meeting is scheduled for September 17. Forecasts show a 64% chance that the Fed will cut interest rates in Q4 2025, which could create stronger momentum for the crypto market.
Patience before investing in Altcoin
Although Bitcoin's breakout is clear and positive signs indicate that the altcoin season may be approaching, Virtual Bacon still advises investors to be cautious. The altcoin season will only be confirmed when:
Bitcoin's dominance rate has decreased sustainably.
ETH/BTC breakout.
Global liquidity continues to expand.
Therefore, investors should not rush to invest in low-cap altcoins but should pay attention to large-cap coins like Ethereum and Solana. Additionally, it is advisable to wait for further confirmation signals from macroeconomic factors such as the monetary policies of central banks and other macroeconomic indicators.
Although Bitcoin is currently leading the market with a strong breakout, the altcoin season has not yet arrived. Investors need to be patient and wait for clear confirmation signals before engaging in alternative coins. The cryptocurrency market still holds many opportunities, but only when there is stability in liquidity and macroeconomic factors can the start of a real altcoin season be confirmed.