The first phase of the crypto bull market is characterized by sector rotation, while the second phase features accelerated capital inflows into strong sectors and targets. At this time, the rotation effect gradually weakens, and the market needs strong sectors to demonstrate exceptional capital-raising capabilities. Therefore, frequent rotation may lead to missed opportunities; long-term positioning is a wiser strategy.
Is the altcoin season about to arrive?
Bitcoin, as the leader of digital currencies. When Bitcoin's market share shows an upward trend, it usually means a large influx of funds into the Bitcoin market, which often leads to the altcoin market entering a relatively sluggish phase, that is, altcoins enter a bear market.
Conversely, if Bitcoin's market share declines, this may signal a shift of funds to other cryptocurrencies, especially altcoins, which often heralds the arrival of a bull market for altcoins.
Looking back at history, we can see that in the past few altcoin bull markets, Bitcoin's market share has significantly declined. Now, Bitcoin's market share has fallen below the boundary of its upward channel, reminding us of the explosive altcoin market scenes of 2017 and 2021.
In March 2017, Bitcoin's market share dropped from 80% to 30%, leading to the explosion of the altcoin bull market; in January 2021, Bitcoin's market share fell from 70% to 40%, also triggering an altcoin bull market. Now, in December 2024, Bitcoin's market share is at 56% and has fallen below its upward channel. If this trend continues, we may be witnessing the arrival of a new altcoin season.
The last significant drop in Bitcoin's market share was in January 2021, after which altcoins began to rise. Until June 2023, Bitcoin rose sharply while altcoins fell, causing retail investors to suffer losses. Now, Bitcoin's market share has fallen below the upward channel, which may indicate that a new altcoin season is about to arrive.
Funding trends of the altcoin season
The rise of altcoins = Bitcoin breakout × Ethereum trend.
Bitcoin drives the overall market, while Ethereum amplifies market risk appetite. A breakout of Ethereum at its high is the true signal for the start of the altcoin season: 1. Ethereum's rise drives mainstream assets to strengthen; 2. After mainstream assets rise, funds gradually flow into high-risk altcoins.
This forms a clear transmission chain: Bitcoin → Ethereum → Major cryptocurrencies → Mid-cap and small-cap coins → Various altcoins begin to surge → Bull market ends, entering a long bear market.
The start of the altcoin season usually begins with the rise of some innovative projects, such as:
Some emerging projects: for example, SUI;
Some MEME coins and shitcoins: for example, PNUT, PEPE, VIRTUAL;
Some undervalued veteran altcoins: for example, XRP, XLM, TRX, OM, etc.
With the surge of altcoins, the market will enter a state of extreme enthusiasm, which can also be seen as a warning signal, indicating that a market reversal may occur.
Summary
The crypto market in December presents both opportunities and challenges. Corrections in a bull market are good opportunities for positioning; holding quality crypto assets firmly can help cope with market fluctuations. At this stage, focus on the ETH ecosystem, strong DeFi projects, and altcoins with resilience and strong narratives. Buckle up and prepare for the next round of market acceleration!