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Are we in Altcoin Season yet? Introducing the CMC Altcoin Season Index,
If 75% of the top 100 coins outperform Bitcoin in the last 90 days, it's Altcoin Season. Remember, stablecoins like Tether and DAI, as well as asset-backed tokens such as WBTC, stETH, and CLINK, aren't included.
How can I tell when it's Altcoin Season?
During Altcoin Season, several distinct market characteristics emerge:
ā¢ Increased Altcoin Dominance: Altcoins collectively gain prominence in the cryptocurrency market. In the recent Altcoin Season in May 2021, the combined market capitalization of the top 100 altcoins reached around 130% of Bitcoin's.
Rapid Price Appreciation: Altcoins experience significant price increases across the board, often outpacing the growth of Bitcoin. For example, large-cap altcoin prices achieved 174% returns versus BTC's 2% during the Altcoin Season from February to May 2021. Many narratives pop up and are not limited to just one or two trends.
ā¢ FOMO: Overall market sentiment during Altcoin Season is typically bullish, driven by optimism about the potential for altcoins to deliver substantial returns. FOMO mentality is evidenced by high 24-hour trade volume across all large-cap coins, leading to increased buying pressure and price momentum.
What altcoins are used in this index? Is Ethereum an altcoin?
We designed the index to select the top 100 coins ranked on CoinMarketCap at the end of each day, excluding stablecoins like Tether and DAI, as well as asset-backed wrapper tokens such as WBTC, stETH, and CLINK. Ethereum is considered part of the altcoin mix in this index.
What's the index methodology?
The index uses the top 100 coins ranked on CMC (excluding stablecoins and wrapped tokens) and compares them based on their rolling 90-day price performances. If 75% of the top 100 coins outperform Bitcoin in the last 90 days, it's Altcoin Season. If only 25% or fewer outperform Bitcoin, it's Bitcoin Season. This calculated number is scaled from 1 to 100 and refreshed on a daily basis.
What can I do with this information?
Altcoin seasons often follow a similar pattern, where:
Bitcoin price rises rapidly, introducing positive bullish sentiment into the market. Bitcoin market cap increases, driving up Bitcoin dominance to a relatively high level.
Then Ethereum price increases and more activities occur on the network. More Dapps are being used and built, and there is an influx of users into the ecosystems, causing many narratives to gain rapid popularity.
ā¢ This upward trend causes the rise of market performance across different sectors, and the price increase attracts funds and capital to rotate out of Bitcoin and invest in other upcoming opportunities. This is reflected in the market as an Altcoin Season.
Therefore, by monitoring the CMC Altcoin Season Index, you can scale the data and visualize the market sentiment.
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