The cryptocurrency market shares several similarities with traditional financial markets, one of which is the occurrence of bull runs. During these bullish periods, investor optimism surges, leading to increased willingness to invest.
What is Altcoin Season?
Altcoin season, often referred to as altseason, is a specific timeframe in the crypto market when the market capitalization of altcoins surpasses that of Bitcoin (BTC). During this season, investor interest shifts from Bitcoin and its futures to alternative cryptocurrencies, such as Ethereum (ETH), Dogecoin (DOGE), Shiba Inu (SHIB), and Solana (SOL).
This phenomenon results in heightened trading activity for altcoins, driving their prices upward. Typically, the price appreciation of altcoins during this period outpaces that of Bitcoin.
Recent Examples of Altcoin Seasons
While skepticism about altcoin season is common due to the unpredictable nature of the crypto market, historical data demonstrates its reality. Here are some notable examples:
- Late 2017 – Early 2018
- Bitcoin’s dominance plummeted from 86.3% to 38.69%, with its price dropping from over 20,000 to under 6,000. This decline in dominance marked the rise of altcoins.
- The altcoin boom was fueled by a surge in initial coin offerings (ICOs), with popular projects like Tezos and EOS raising 232million and 4.1 billion, respectively.
- Early 2021
- Following the pandemic, many investors sought alternatives to Bitcoin, leading to increased interest in non-fungible tokens (NFTs), DeFi projects, and memecoins. Altcoins like Shiba Inu and Solana gained significant traction.
- During this period, Bitcoin’s dominance fell from 70% to 38%, while altcoins’ market share surged from 30% to 62%.
These movements illustrate that altseason often coincides with technological advancements and the launch of new blockchain projects, as investors look beyond Bitcoin.
Key Indicators of an Approaching Altcoin Season
While it’s challenging to predict the exact timing of altcoin season within a bull market, certain indicators can signal its onset:
- Rising Altcoin Dominance: An increase in the dominance of altcoins relative to the total cryptocurrency market cap can indicate the beginning of altcoin season. This shift often suggests that investors are diversifying their portfolios beyond Bitcoin.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice.
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