“Is Altcoin Season here?”
The blog below will answer this question while covering key aspects, such as the Altcoin season index and other market insights.
First, let’s understand what an Altcoin Season is.
What is Altcoin Season?
Altcoin season is the period when investors move their funds away from Bitcoin to other currencies, resulting in significant gains for different altcoins (currencies other than Bitcoin). It is also called “Altseason,” which marks massive gains for altcoins owned by crypto traders and investors.
In simple words, it's the time to book profits for altcoin investors.
During alt season, several cryptocurrencies often hit extraordinary price levels because the funds shift from Bitcoin to altcoins. This triggers a chain reaction bringing more investors in the space due to FOMO rising prices, injecting more funds into altcoins for more price growth.
Some common signs of Altcoin season-
- Bitcoin's dominance relative to the total crypto market starts to decrease.
- Altcoins start to give more returns than Bitcoin in that time frame.
- The altcoin trading volume starts to surge due to rising trading activity.
- Specific crypto narratives like DeFi, Gaming or AI start gaining extra attention and popularity.
Another key factor in determining whether Altcoin Season is here is the Altcoin Season Index—the ultimate benchmark.
What is the Altcoin Season Index?
An Altcoin Season Index is a parameter that provides real-time data on whether the crypto market is currently in its Altcoin or Bitcoin season. This Index is based on the performance of the top 50 altcoins relative to Bitcoin over the past 90 days.
An Altcoin Season Index examines the Altcoin season by comparing top 50 altcoin price gains to that of Bitcoin and if 75% of the top 50 coins perform better than Bitcoin, it is considered as the onset of potential Altseason. However, it does not include stablecoins like Tether ( USDT) and Dai (DAI) or asset-backed tokens like WBTC, stETH, and xLINK.
Note: Some analytics websites calculate this Altseason by comparing Bitcoin’s performance relative to top 100 coins.
Generally, Altcoin Season Index at 25, indicates that Bitcoin has more dominance, and the Alt Season is not near. This also means that Bitcoin is outperforming at least 75% of the top 50 altcoins in the 90-day window.
On the contrary, if the Altcoin Season Index hits 75 or higher, it means that the top 50 altcoins are outperforming altcoins in the same time frame.
What Causes an Altcoin Season?
An Altcoin season occurs due to the investor's psychology and actions. After Bitcoin pumps significantly and marks the beginning of a bullish phase in the crypto market, it starts going sideways for a while to gain stability. This scenario makes investors look for more profitable opportunities in the crypto space. As a result, they often trade their Bitcoin holdings for Ethereum or other promising altcoins, triggering an Altcoin season.
Even if Bitcoin does not go sideways, the investors start looking for altcoin options with smaller market cap and higher upward potential to multiply and diversify their profits. Since historically, the cyclic returns of multiple altcoins have been higher than Bitcoins, investors often shift to them for boosting their gains even higher.
Alright, enough with the basics.
Now, let’s get straight to the point: “Is Altcoin Season here?”
Is Altcoin Season Here?
To answer if the Altcoin season is here, the best way is to consider the current state of the Altcoin season index.
At the time of writing, the Altcoin Season Index is at 82, which is higher than the minimum requirement of 75 to declare an altcoin season. This means that as per the Altcoin Season Index, it is currently an altseason in the crypto space.
Its detailed observation of top 50 cryptocurrencies (excluding stablecoins and asset backed coins) indicates that 40 out of 50 altcoins outpassed Bitcoin in terms of last 90 day returns.
Since the Altcoin Season Index requires at least 75% of altcoins to surpass Bitcoin to be officially considered an altcoin season, the current market meets the criteria—it’s officially Altcoin Season!
This level of the Altcoin Season index has been the highest since January 22, 2024, when Altcoins showcased strong performance that lasted until March. Unlike that period, Stellar ( XML), Hedera (HBAR), Ripple (XRP), Algorand (ALGO) and Sui (SUI) are leading the rally this time.
Another key factor supporting the evidence is the rising market cap of stablecoins. In November, the stablecoin market cap crossed $190 billion, surpassing the previous all-time high of $188 billion before Terra LUNA collapsed. The standard market observation states that stablecoins are the key liquidity source for investors to buy assets. Thus, such growth in their market cap indicates that more investors are putting money in stablecoins to trade for other cryptocurrencies. If you too are looking for the best platform to buy/sell USDT at the best price don’t miss out this guide.
Despite parabolic growth in market cap, the dominance of stablecoins has not increased. This also indicates that investors are increasing their diversification into altcoins.
Even if we consider the analysis of TOTAL2, an indicator that analyzes the market cap of the top 125 altcoins, we can see a bull flag forming on the 3-day chart.
Such a bull flag usually leads to two rallies separated by a short consolidation phase. It starts with a quick price surge where buying pressure surpasses the selling pressure. This point is called “Flagpole”. Then comes a pullback period, creating a “Flag” with two parallel trendlines. Such a pattern indicates a possible continuation of the bullish momentum.
As per this chart pattern, the TOTAL2 representing the market cap of the top 125 altcoins is likely to reach $1.45 trillion. If that turns out true, multiple altcoins will break their all-time highs and make new ones.
The fundamental factors also indicate the possibility of more upward momentum for altcoins after Donald Trump's victory in the US elections. His pro-crypto policies and the resignation of US SEC chairman Gary Gensler in January can be the perfect recipe for several altcoins to hit new highs in the first few months of 2025. With talks of multiple altcoin ETFs and their potential launches in 2025, the altcoin season may last by 2025.
All these factors, including the Altcoin Season Index and fundamental factors, indicate a strong possibility that Altcoin Season might already be here. With multiple top altcoins like XRP, XLM, ALGO, SUI and LINK breaking their key resistance levels, the altcoin season seems to have kicked in and has a long way to go before resting up.
FAQs
How long does the Altcoin season last?
An Altcoin season may last weeks or even months, depending on fund inflow, market sentiments, new developments, and regulatory updates. Considering the institutional involvement and support from world leaders, the crypto market is likely to see a gigantic altcoin rally in the upcoming months.
Is the Altcoin Season Index correct?
The altcoin Season Index is crucial for checking market fund inflow into altcoins. Its idea is based on a study of the top 50 altcoins and their 90-day performance. If they outperform Bitcoin in the given time frame, the Altcoin Season Index declares a score indicating the Altcoin season. It is a highly trusted and preferred metric among crypto traders.
When was the last Altcoin season?
The last significant altcoin season occurred in early 2021 after Bitcoin broke its 2017 bull market peak of $20,000 in December 2020. A few weeks later, when Bitcoin's rally solidified, the altcoin market started catching up, leading to a surge in their prices. During this period, Bitcoin dominance dropped significantly as altcoins gained market share. This marked a classic altcoin season when investors diversified into alternative cryptocurrencies amidst Bitcoin's strong performance.
Which are the best altcoins to buy in 2024?
The best altcoins to buy in 2024 depend on your financial goals and risk tolerance. We believe that a diversified portfolio is key. So, consider altcoins from various growing sectors like DeFi, Layer 2 solutions, gaming, and AI. For high-risk, high-reward, explore emerging projects. Always research fundamentals and market trends to align your investments with your strategy. However, this meticulously researched and penned blog might help you to find the best crypto to invest in.
