On Thursday, Bitcoin rose to $78,254, increasing 2.69% within 24 hours and outperforming the broader cryptocurrency market’s 2.08% gain, as a shift in macro risk appetite boosted prices of digital assets and stocks.
Despite ongoing uncertainty, oil prices continue to show signs of recovery. After President Trump stated on Thursday that he was “not satisfied” with Iran’s latest peace proposal, mediated by Pakistan, U.S. oil prices erased earlier losses. Tensions over the Strait of Hormuz remain unresolved, with Brent crude prices surpassing $120 per barrel. However, markets continue to rise, indicating that investors are currently more focused on macroeconomic tailwinds than geopolitical volatility.
Is altcoin season about to begin?
As Bitcoin's price approaches $80,000, all traders are asking one question: Does this current rally signal the imminent start of a broader altcoin season? Abhay Agarwal, founder and CEO of GetBit, told Coinpedia that the answer to this question requires careful consideration.
Agarwal said: "Historical data shows that market cycles often begin with Bitcoin leading the market trend. As confidence grows and liquidity expands, capital gradually flows into riskier segments of the market."
He carefully distinguished between genuine cyclical rotations and short-term market momentum chasing. Bitcoin remains the primary macro asset in the space, especially for institutional and long-term capital. This dynamic will not reverse simply due to improved market sentiment.
“Although there may be periods of broader participation, the strength and sustainability of the cycle still depend primarily on Bitcoin,” Agarwal said.
Why are meme coins also rising?
The price of Dogecoin and other meme-based tokens has risen in tandem with Bitcoin, and Agarwal described this pattern as entirely consistent with the behavior of liquidity in a risk-on environment.
He said, "Meme coins typically benefit during periods of high market liquidity and strong retail participation. When Bitcoin rises and market sentiment improves, it creates a broader risk-on environment. Speculative capital often flows into more volatile assets with weaker fundamentals, including meme coins."
Iranian variable
Trump's dissatisfaction with the peace plan for Iran has become a factor that could quickly reverse Thursday's oil price rebound. Oil prices reacted immediately to the news, erasing earlier losses and rising back toward recent highs. Previously, markets had expected the conflict to eventually be resolved, but new indications now suggest that a resolution is not imminent.
Bitcoin and the cryptocurrency market exhibit a correlation of up to 83.5% with the S&P 500 index; therefore, any deterioration in macroeconomic sentiment triggered by oil prices and inflation expectations could impact digital assets as swiftly as it does in equity markets. While risk-on sentiment is genuinely present, so too is uncertainty surrounding it.