What is an altcoin season? My understanding is very simple.
1. First, break through the March price peak.
2. Then break the historical high of 2021.
3. The process involves capital inflows - capital outflows
Capital flows into BTC ➩ BTC dominance increases ➩ Altcoins get drained ➩ Altcoins fall
Capital flows out of BTC ➩ BTC dominance decreases ➩ Altcoins accumulate ➩ Skyrocket
This chart is based on statistical analysis of the performance of the top 100 tokens by market cap, dividing these tokens into 'those that have broken through the March price peak' and 'those that have not broken through the March price peak,' with 50 tokens in each category. The data source is the relevant information displayed in the chart.
1/ In terms of price, altcoin prices are still hovering at bear market levels.
Originally, I wanted to focus on the top 100 tokens by market cap to see how many of them broke through the March price peak. However, I found that the number was not enough.
So I continued to expand the range until I reached the top 115 tokens by market cap, which provided a sufficient sample size.
This means that among the top 115 tokens by market cap, only 50 successfully broke through the March price peak.
Only 15 tokens have broken through the historical highest position of 2021 (excluding new coins), and only 29 tokens have outperformed BTC compared to the March high.
🤖 This might be an opportunity. How to choose targets?
- As long as the project is still operational, the codebase and social media updates haven't stopped, and there are administrators in TG and Discord, it is likely that institutions have already intervened.
- If the profit and loss are suitable, once the timing is right, it can pull you three to five times in a week, and within a month, it can unleash the momentum built over three to four years. The altcoin season can complete the two-year bull market process of Bitcoin in just seven days.
2/ From an emotional perspective, the sentiment is still bearish.
Now, every group is silent. The only wish of group members is to break even. Although Bitcoin's price keeps hitting new highs, the assets in members' wallets continue to shrink.
Those who are truly at the end of a bull market have long lost their rationality. They not only invest all their savings into the market but also borrow money from relatives and friends, taking out loans without regard for consequences. Buyers of Bitcoin will envy those who buy altcoins; in that kind of frenzied atmosphere, as soon as you sell your coins, you will miss the opportunity to buy them back at the selling price. Traders will use various news and pump techniques to create this atmosphere; clearly, we are not in a bull market at the moment.
3/ How to judge altcoin season, 4 indicators you must know
1️⃣ Altcoin Index
Tracking market sentiment refers to whether it points to Bitcoin or altcoins. If 75% of the top 50 altcoins have outperformed Bitcoin in the past 90 days, then it's altcoin season; otherwise, it's Bitcoin season.
🔗 blockchaincenter.net/altcoin-season…
2️⃣ BTC Dominance (Market Share)
Capital flows into BTC ➩ BTC dominance increases ➩ Altcoins get drained ➩ Altcoins fall
Capital flows out of BTC ➩ BTC dominance decreases ➩ Altcoins accumulate ➩ Skyrocket
🔗 cn.tradingview.com/symbols/BTC.D/
3️⃣ TOTAL 2
TOTAL2 represents the total market cap of the top 125 altcoins excluding BTC, which can show the capital inflow into altcoins.
🔗 tradingview.com/symbols/TOTAL2/
4️⃣ ETH/BTC exchange rate
From the market cycle perspective, the flow of capital generally is:
BTC — ETH — Major Altcoins — Minor Altcoins — Meme Coins
Bitcoin is faith, Ethereum is the leader, and the strength of Ethereum is a prerequisite for altcoin surges. When the Ethereum exchange rate strengthens, it is worth paying attention to altcoins.
The biggest fear in a bull market is: greed, fear, blindness, herd mentality, going with the flow, chasing highs and selling lows, because it’s a place where only a few people make money.
If you fear missing out on the altcoin season, the only thing you can do is find a cost-effective 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 have? 👇👇
#BTCUSD #ETH
