Alt season (the period when altcoins outperform Bitcoin in terms of profitability) occurs due to several common factors that repeat themselves in the crypto market. An analysis of previous alt-seasons such as 2017-2018 and 2020-2021 shows that they often began when Bitcoin's dominance declined and investors turned their attention to alternative cryptocurrencies.
The first significant alt season occurred in 2017, when Bitcoin's market share plummeted due to the rise in popularity of ICOs (Initial Coin Offerings) such as EOS and Tezos, which fueled interest in altcoins. The next significant alt season of 2020-2021 was also characterized by the decline of Bitcoin's dominance amid the popularity of NFTs and memcoins (such as Dogecoin and Shiba Inu), which contributed to the growth of altcoin trading volumes.
Usually, alt-seasons are accompanied by an increase in trading activity and market volumes of altcoins, as well as a decline in the dominance of Bitcoin. Another indicator is the Alt Season Index, which indicates its start when 75% of the top altcoins have outperformed Bitcoin over the past 90 days.
These factors indicate that the high season is a periodic and predictable phase, although its current time frame remains uncertain in the market. Analyzing historical data and understanding indicators can help investors predict returns at this time.
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