How is the altcoin season formed?
The altcoin season is usually related to the market performance of Bitcoin.
When the price of Bitcoin rises to a high level, investor enthusiasm declines, and funds flow out of Bitcoin into mainstream coins like Ethereum, driving their prices up.
As the prices of mainstream coins reach their peaks, funds further flow into smaller market cap altcoins, where a small amount of capital can significantly push up the prices of altcoins.
Eventually, when Bitcoin's market cap approaches half of its bull market peak, market sentiment weakens, entering a bear market, and Bitcoin's price corrects by about 70%.
At the bottom of the bear market, the main players begin to accumulate, and once the accumulation is complete, the price rises, initiating a new round of bull market.
This process demonstrates the cyclical volatility of the crypto market.
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