Bitcoin has officially surpassed the $118,000 mark, prompting discussions about the onset of a new bull cycle. Analyst Virtual Bacon provides insights, cautioning against rushing into altcoins.
Bitcoin Bull Run
In the past week, Bitcoin has surged by 8.8%, increasing nearly 10% this month alone. This rise is seen as a significant bullish sign. Virtual Bacon emphasized that Bitcoin typically leads in early bull phases, with altcoins following as liquidity shifts.
> "Bitcoin’s breakout confirms the beginning of a new cycle," CITE_W_A.
Upcoming Altcoin Season
Bitcoin dominance currently stands at 64.58%, down from 65.50% as of July 1. While this slight drop is a positive sign, altcoin seasons usually begin after a sustained decline in BTC dominance. Virtual Bacon highlighted early indicators, such as Ethereum's price increase against BTC signaling a potential altcoin season.
- Ethereum has risen 10.53% this month, - The current ETH/BTC ratio is 0.02516, up from 0.02276. - A strong weekly close above 0.024 could signify a true breakout.
Federal Reserve's Influence
A major factor supporting the crypto rally is the Federal Reserve’s quiet liquidity injection. Virtual Bacon outlined two major moves:
- $11 billion repo injection on June 30, - Proposal to reduce the Supplementary Leverage Ratio (SLR) for large banks.
These actions increase bank reserves and promote more lending, enhancing liquidity in the financial system.
While Bitcoin's breakout is undeniable and signs for altcoins are promising, Virtual Bacon advises investors to remain cautious. A confirmed altcoin season requires a sustained drop in BTC dominance, a breakout in ETH/BTC, and a full expansion of global liquidity.
