Alt season, the period when altcoins (non-Bitcoin cryptocurrencies) outperform Bitcoin, typically occurs after Bitcoin reaches a significant price peak or experiences a stabilization phase. Historically, alt seasons have often followed a few months after Bitcoin's major bull runs, as traders look to invest in smaller coins with potential for high returns.
Some general markers include:
1. Bitcoin Dominance Declines: As funds flow from Bitcoin to altcoins, Bitcoin’s dominance in the market drops, signaling the start of an alt season.
2. High Volume in Altcoins: Increased trading volumes in altcoins, especially those in the top 20 by market cap, can indicate a shift in interest toward them.
3. Strong Performance of Major Altcoins: When Ethereum, XRP, and other well-known altcoins begin to rally, it often signals the onset of alt season, as these usually gain before smaller altcoins.
4. Altcoins Outperforming Bitcoin: This can be measured by comparing the percentage gains of altcoins against Bitcoin.
Historically, alt seasons occurred in early 2018 and again in late 2020 to early 2021 after Bitcoin had significant run-ups, followed by stabilization or minor corrections. The exact start of an alt season is usually easier to pinpoint in hindsight, as it unfolds based on market sentiment and investment flows.
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