A chart tells you when the altcoin season will explode! What trading opportunities do retail investors have?
Referring to the historical BTC cycle during bull markets, there is a simple flow of funds before the altcoin season occurs: BTC → ETH → large-cap coins → mid/small-cap coins → almost all coins begin to surge → bull market ends and enters a long bear market phase.
The altcoin season typically presents a typical initiation path, generally starting from the following aspects:
Some innovative projects begin to rise first, represented by: SUI
Some MEME coins and various air coins then begin to rise, represented by: PNUT/PEPE/VIRTUAL
Some undervalued old altcoins continue to rise, represented by: XRP/XLM/TRX/OM (the best-performing representative coin)
All altcoins are skyrocketing, and the market enters a state of frenzy (this is also a huge warning signal, as extremes often lead to reversals).
The dominance of BTC has retraced from a high of 61% to around 55%, and there is significant resistance at the 55% position for the dominance of the big coin.
The altcoin season index has also reached 71, approaching the altcoin season indicator of 75. In the past 90 days, among the top 50 tokens, 35 have outperformed the big coin, accounting for as much as 70%!
According to our statistics, among the currently top 50 tokens by market value, only 11 have surpassed their historical highs (including new coins in this round). They are: XRP, OM, WBT, TRX, RENDER, LEO, BTC, SOL, BNB, etc.
So don't hesitate any longer; hold onto your altcoins. We just need to pay attention to the big coin's dominance dropping below 50%, and altcoins will usher in a historic breakthrough and surge!
But will all altcoins surge across the board?
Question one:
In the bull market of 2021, the total market value of the cryptocurrency market reached a peak of $2.8 trillion, with the total market value of altcoins reaching as high as $1.6 trillion. As Bitcoin (the big coin) surged from breaking through the previous high of $20,000 to $60,000, the total market value of altcoins skyrocketed from $200 billion to $1.6 trillion, an increase of about 8 times.
The current international cryptocurrency market value is $3.8 trillion, with a 0.53% change in the past 24 hours and a 135.66% change over the past year. As of today, Bitcoin (BTC) has a market value of $2 trillion, with a dominance rate of 52.41%. Meanwhile, the market value of stablecoins is $200 billion, accounting for 5.38% of the total cryptocurrency market value. Assuming you still believe that the total market value of altcoins can increase 8 times, then the future total market value of altcoins would need to reach $12 trillion. If at that time we calculate BTC.D at 40%, then the peak total market value during the bull market would need to reach $19 trillion. This is more than 5 times the last bull market peak, and subtracting the current $3.8 trillion means we still need $15 trillion in liquidity. So, where will such a large amount of funds come from?
The second question:
You might think that many altcoins haven't increased in price, but from another perspective, they have actually risen quite a bit. Take ARB as an example; from a price performance standpoint, ARB seems to show little increase, and its price trend even resembles that of a stablecoin. However, from the perspective of market value, ARB's market value has grown by over a billion dollars in the past year. This is because its token circulation has increased from an initial 12.75% to the current 26.5%.
For those tokens with a high fully diluted valuation (FDV), even if their prices do not appear to have risen significantly, maintaining their market value requires a large number of investors (funds) to support it. There are many popular projects with high FDV in the market currently, and if you still expect these new high FDV projects to rise tenfold or even a hundredfold, one must ask, where will such enormous funds come from?
Therefore, this bull market will not experience a widespread surge like in 2021; the altcoin season only belongs to certain tokens, and finding the right targets also requires a bit of luck.
If you're afraid of missing the altcoin season, the only thing you can do is find a high-value entry point and set a stop-loss. As for whether it can break historical highs again, luck is very important.
So what trading opportunities do we still have?
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