Patiently Awaiting Altcoin Season
Why Bitcoin Alternatives are Slumbering Giants
Spend any amount of time in Telegram — CloakCoin’s Official channel, or others — and you’ll encounter so many questions that start with, “when?”
When DEX? When Lambo? When moon? And, nearly everyone seems to have a common question: “when Alt Season?” But before we even try to decipher an answer, let’s first explain what the term means.
Any bitcoin alternative — CloakCoin, for example — is classified as an “altcoin.” And when alts’ overall market captitalizion rises faster than bitcoin’s, we enter a market condition known as ‘Alt Season.’
Back in December of 2017, for example, the market experienced one of the most fabulous Alt Seasons of all time. For a few exciting weeks, the majority of altcoins multiplied their initial market valuation many times over.
To be clear, we certainly don’t condone trying to time the market, nor are we dishing out any financial advice here. However, studying history allows one to distinguish trends.
The good news is that Alt Season — just like the Earth’s four distinct climate intervals — follows a cyclical pattern. And today, we’re going to teach you how to spot it.
The Role of Bitcoin Dominance
At the time of writing, the crypto market’s total value is nearly $252 billion. Well, at least what CoinMarketCap lists. These metrics fail to capture the substantial volumes, primarily belonging to bitcoin, flowing through over-the-counter exchanges.
And of that quarter-trillion, bitcoin claims close to $175,000,000,000 for itself. Yes, that is a lot of zeros! But, as everyone knows, what goes up must come down.
Like any market in which assets trade, these values continuously fluctuate. Put simply, the figures you see here are different than what’s on display today. However, the importance lies in the metric itself — bitcoin dominance is worthy of our attention.
Triggering an Avalanche
As more investors buy or hold bitcoin, the digital asset’s dominance continues to climb. And, until recently, bitcoin market share enjoyed a rapid ascent. Bitcoin alternatives endured their share of suppression as the original crypto saw its MarCap blossom to 28-month highs.
Lately, however, bitcoin’s dominance has begun to retrace. When the price of bitcoin floats to the higher side of the charts, sales begin as traders take profits. And, naturally, as more bitcoin re-enters the market — more sellers than buyers — its dominance declines.
Furthermore, as the markets are primarily speculative, price is often affected by sentiment. And when the price of bitcoin dips — even though the underlying blockchain tech may be stronger than before — market sentiment shifts.
Some view Bitcoin’s declining price as a sign of weakness. Investments seen as ‘weak’ can become overlooked as investors search for promising altcoins. So, when a bitcoin rally loses its legs and stalls out, the potential for an Alt Season emerges.
Again, this isn’t financial advice, but one could argue that the best time to accumulate altcoins is when bitcoin dominance is at peak levels. Similarly, the best time to hold altcoins — with the intention of trading or selling — is when bitcoin’s dominance is backsliding.
The faster bitcoin falls from grace, the quicker the onset of Alt Season.
Hint, hint: given today’s very high bitcoin dominance, coupled with bargain-basement altcoin prices, now may be a good time to fill bags. But we’ll leave that decision up to you!
So, do we have an answer to the “when Alt Season” question? Of course not — our crystal ball has broken. However, with bitcoin dominance bubbling up to levels unseen in over two years, a shift in tide seems ever the more imminent.
The original cryptocurrency cannot maintain such a wide margin of dominance forever. And hopefully, for all of us, a new season will soon dawn. You see, the prolonged bear market we’re in — a Crypto Winter, if you will — can only last so long.
Markets are cyclical and eventually, like a Springtime thaw, the sun will shine upon another Alt Season. And when that time comes, those holding bitcoin alternatives can enjoy a season of smiles.