This image outlines the "Path to Altseason", a framework describing how money flows within the cryptocurrency market, typically leading to a surge in altcoin prices. Here’s a breakdown:
Phase 1: Bitcoin
Money flows into Bitcoin, causing its price to surge.
This phase sees Bitcoin dominance increasing as the market focuses on the top cryptocurrency.
Phase Overlap: Bitcoin to Ethereum
Capital begins flowing into Ethereum, which struggles to match Bitcoin initially.
Ethereum starts to outperform Bitcoin, signaling a transition.
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Phase 2: Ethereum
Ethereum outperforms Bitcoin, fueling speculation of a potential "flippening" (Ethereum surpassing Bitcoin in market cap).
Investors start noticing large buy-ups in Ethereum.
Phase Overlap: Ethereum to Large Caps
Money trickles into large-cap altcoins, signaling the next stage of the cycle.
Large-cap altcoins see significant buy-ups as attention broadens.
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Phase 3: Large Caps
Large-cap altcoins go parabolic as Ethereum outpaces Bitcoin.
This phase is characterized by strong performances in well-known, high-market-cap projects.
Phase Overlap: Large Caps to Small Caps
Money begins shifting to altcoins with strong fundamentals, regardless of market cap.
Select smaller coins experience pumps as enthusiasm spreads.
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Phase 4: Altseason
Large caps peak and start to show signs of topping out.
Mid-caps, low-caps, and micro-caps all pump simultaneously.
Every coin seems to experience parabolic growth, driven by market euphoria.
Meme coins gain traction, and the excitement is palpable, often signaling the cycle’s peak.
Key Insights:
This progression helps traders identify where capital is flowing.
Understanding the phases can assist in timing investments to maximize returns.
Altseason marks the height of market enthusiasm but also requires caution as it often precedes a correction.