So you’ve probably heard this,
“When is Alt season”
“Alt season is here”
“Get ready for #AltSeason”
If you’re new to this space, you may be a little clueless as to what an alt season means or when does it occur? Specifically, are we in an alt season now? How long does this last? Hopefully, by the end of this post, you should have some answers.
As an additional reading, I suggest you have a look at an earlier post that will clear things up about market cycles and the broad Bitcoin and Altcoin play.
I like to think of this play as that of David (altcoins) & Goliath (Bitcoin). If you’re unsure about those characters, ignore them and just continue below.
Just some background to market cycles and the play-off there:
- All asset classes (crypto, gold, stocks, property) move in cycles
- The cycles typically include up moves, down moves and sideways moves
Something like this,
This (the above chart) is the total crypto market move since 2017. As you see, there was one prominent cycle around January 2018 – saw an up move preceding that month and a down move following that. The next prominent cycle is what we are amid currently. Between these two, there have been smaller sized cycles.
Let’s focus on the up moves within these cycles.
If you’ve read that article I linked earlier, the crypto market broadly consists of two forces: Bitcoin, for its sheer dominance, besides being the basis of this industry. And then there are all other coins, lead by Ethereum. All these other coins form what are the Altcoins (alternative coins, being alternates to Bitcoin).
So an upmove in a cycle will have different parts to it,
The lower right quadrant is what defines an alt season. It’s where alt coins steal the show from Bitcoin.
So the first concept you need to understand here is BITCOIN DOMINANCE.
Let’s consider the current market size,
If I were to convert this in a pie chart,
If charts are not your thing, what this graph is saying is that Bitcoin makes up around 59.2% of the crypto market. Meaning a large part of the money in crypto is in Bitcoin. The balance, 40.9%, is spread across alt coins.
Think of this play between Bitcoin and Altcoins as a see-saw,
Alt season involves that little bear growing in size and the see-saw tilting in his / her favour.
With what you’ve read so far, check this picture out,
This is a chart from January 2017 to end 2018 (The up move and down move of the previous market cycle I mentioned). Notice this,
- Bitcoin dominated the market initially; Rest of the coins (altcoins) are flat or see a slight upmove
- Bitcoin dominance starts to fall around April onwards; Altcoins dominance rises. Alt season is here.
So a phase in the up move where Altcoins dominance begins to rise as compared to Bitcoin dominance is what defines Alt season.
Here’s a look at the Bitcoin dominance over the last six month. Spend sometime here and see what you think,
Notice how, the dominance of Bitcoin began rising till it reached a peak in January. It then started coming off, falling. So from a dominance of around 74% in January, it came down to the current levels of around 60%. What this means is Altcoins have been gaining strength.
Now, this next chart might seem a little messy. But if you are able to get through the mess, this entire thing will make some more sense
This is the same previous chart of the Bitcoin dominance. However, I’ve added in an orange line to it. That orange line is charting the size of the Altcoin market (altcoin market cap) (you can check that on Trading View with a term called TOTAL2).
See how the orange line (altcoins market cap) takes a life of its own when the black one starts to fall. The up move is a lot clearer and sharper. That’s David (altcoins) winning against Goliath (Bitcoin).
An alt season sees altcoins make insane moves, like we are currently seeing. To me, an alt season has been ongoing since the Bitcoin dominance started coming off. So we are amid an alt season. Some may argue that’s not the case. There’s no science here. The closest thing that comes to giving this some formal definition or recognition is this resource by The Blockchain Center Alt Coin Index. As per that an alt season is still not here, though we seem pretty close to it. Here’s a look at that chart,
Mind you, alt seasons also indicate that the next phase is going to be a down move. The alt season is marked by euphoria. Insane amount of it. So remember to take profits as you go along.
Hope this article helped. Do share it with whoever you think it could benefit.
Summing up,
- There’s no exact science on where its an alt season
- I currently see us amid one, though I feel there’s still a fair way to go
- Get a hang and monitor a few things like Bitcoin Dominance, TOTAL2. Simple google searches will take you there
- If you’re just too lazy to do all of that, check out the Blockchain Center resource.
- Finally, remember to take profits along the way. This overall crypto market is still new. No one’s an expert in it. Everyone’s learning as they go. Profit-taking never hurts. Protect your capital, at the least.
And ya some altcoins I like – Zilliqa, Parsiq, NANO, Quant, ORAI, to name a few. Check them out. This site has posts on most of them. But do your own research finally.
