Altcoin
Is Altcoin Season Over Before It Could Begin?
Changing market conditions creating a bearish atmosphere are hurting the potential of an altcoin season.
Bitcoin has received support from the market thanks to the growing demand generated by a successful run of spot BTC ETFs.
Is Altcoin Season Over?
Altcoin season, also known as “altseason,” is a period in the cryptocurrency market where altcoins significantly outperform Bitcoin. This phenomenon is mainly identified by observing two key indicators: the dominance of Bitcoin and altcoin price trends.
Bitcoin dominance refers to the percentage of the total cryptocurrency market capitalization held by Bitcoin. During the peak season, this dominance diminishes as investors move your capital from Bitcoin to various altcoins. A notable drop Bitcoin dominance indicates that altcoins are gaining greater market share.
This decline was last noticed in January this year, when BTC’s dominance dropped dramatically from 54% to 50%. However, since then, dominance has been on an upward trend, reaching 55% in the last month.
This is BTC’s greatest dominance in the cryptocurrency market since the March 2021 crash, when its dominance dropped from 70% to 40% in just a few days.
To know more: What is Altcoin Season? A complete guide
Bitcoin dominance. Source: TradingView
In addition to Bitcoin’s diminishing dominance, Altcoins typically experience substantial price increases. This increase in altcoin prices, often exceeding the growth of Bitcoin, is a clear sign of altseason. Investors seek higher returns by diversifying their portfolios into altcoins, driving up their prices.
Generally, when 75% of the top 50 altcoins, excluding stablecoins, perform better than BTC over a three-month period, the altcoin season is considered active and successful.
However, in the last 90 days, only eight cryptocurrencies have managed to outperform Bitcoin. Even the meme coin craze and the hype around the approval of the spot Ethereum ETF failed to bring out the alternatives.
This points to a disappointing answer to the previous question: the altcoin season is over before it could even begin.
When will the next Altcoin season be?
The answer to this question is not simple since volatility of the cryptocurrency market makes everything very uncertain. Furthermore, developments in macrofinancial markets have also influenced the direction of cryptocurrencies.
However, as of 2022 a pattern has emerged. August 2022 marked the penultimate altseason, after which it took six months for the Bitcoin season to begin. The next and latest altcoin season it started eight months later, in January this year. Now, five months later, we are seeing Bitcoin season again.
To know more: 11 Cryptocurrencies to Add to Your Portfolio Before Altcoin Season
Therefore, if this pattern continues, investors can expect an improvement The altcoin season will begin in approximately seven-eight months. This places the potential timeline for the next peak season in February 2025.
However, it is wise to be wary of the broader market and signals from macrofinancial markets.
Disclaimer
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