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Altcoins took center stage in the early hours of Thursday trading as Bitcoin (BTC) continued to consolidate above $51,000. Nvidias blowout earnings report helped spark a rally for artificial intelligence-related crypto tokens, leading to double-digit gains for a host of projects as traders look to rotate into high-performing sectors in the ongoing bull market.

Altseason interludes are a common occurrence during bull markets and typically happen during periods of sideways trading for BTC, as traders who are accustomed to volatile price action seek out higher-risk tokens to provide a source of alpha.

Data provided by TradingView shows that Bitcoin spent the morning oscillating around support at $51,700 before bears attempted to drive its price lower, dropping it to $50,908 near midday. Bulls rebuffed the attack and pushed BTC back above $51,500, but they are not out of the woods yet as bears remain intent on breaking below the current support level.

BTC/USD Chart by TradingView

At the time of writing, BTC trades at $51,580, an increase of 0.55% on the 24-hour chart.

With Bitcoin back above the $51,000 mark, optimism in the crypto market is still very palpable with a notable catalyst being Nvidia's impressive earnings report, said Mikkel Morch, founder of ARK36, in a note to Kitco Crypto. The chipmaker's fourth-quarter earnings exceeded expectations, propelling a rally in especially AI-tokens.

With multiple tokens recording double-digit gains, Morch noted that The total market capitalization of AI tokens surged past $16.5 billion, outperforming traditional crypto benchmarks like the CoinDesk 20 (CD20), which witnessed a 2.7% decline.

But not all crypto traders are seeing green as the spike in volatility led to a large number of liquidations in the derivatives market, he noted.

Despite Nvidia's positive impact on the market, haphazard price movements triggered over $200 million in liquidations of crypto-tracked futures, Morch said. While some anticipate the onset of an altcoin season, others remain cautious, citing Bitcoin's continued dominance in the market. Analysts suggest that for a true altcoin season to commence, Bitcoin's dominance needs to fall below 45%, signaling a significant shift in investor sentiment towards alternative tokens.

He said that while it's impossible to predict with any certainty, Altcoin season is likely to begin in the coming few months and it could well be driven by AI-tokens as we are seeing the interconnectedness or even convergence of blockchain and AI technology and cryptocurrencies in different combinations into a force of growth to be reckoned with - not just for the crypto community - but on a wider, global scale.

According to Michael Silberberg, Head of Investor Relations at AltTab Capital, $52,500 is a key price level to watch for Bitcoin.

With a 12H candle close above 52500, the market is providing bulls with the opportunity again to take the lead for volatility expansion, Silberberg said. There's still some work to be done, though, but the longer the 12H trend range holds, and BTC floats sideways, the more likely price action is to take another leg up.

However, there is a lot of bearish pressure, such as the 3D TD9 Sell, Fear and Greed in Greed territory, a historic presence of the Feb->March transition being a retracement, overhead resistance at 52K, and a weekly + daily cycle low still looming, he warned. We are cautious this week as vol could break either way but are still generally bullish through the halving.

Market analyst Rekt Capitalsaid that in the near term, Bitcoin is likely going to be see-sawing around this key level of ~$51600 (black) for the rest of the week. The weekly candle close will be most important for confirmation.

Disclaimer:The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Bitcoin bulls fight to hold support at $51k as altcoins rally higher - KITCO