What is Altcoin Season? How to identify Altcoins Season

Hello guys,
It's another day of the week and I'm delighted to be here once again to share with you all a wonderful article which I believe will be beneficiary to us all. As a Steemian, I guess if we are always informed we will not miss out of the market opportunities that comes once in a while.

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Today I want us to look at a topic titled Altcoins Season. It is indeed a wonderful topic which I believe we will need to learn so as to make the little out of our cryptocurrency journey. Without further ado, let's go into details to discuss this very season today.

What are Altcoins Season

When we talk about altcoins Season, we are referring to a period in the cryptocurrency market where majority of the altcoins make a significant move upward from its initial price. This means a period wheremost of the altcoins make 5x, 10x to upto 50x or more of their initial price is what we call the altcoins Season.

Now this doesn't happen often in the crypto space and that is the main reason we call it a season. Bitcoin halving as we all know happens just once after every four years and this is almost thesame with the altcoins Season.

The season doesn't have a specific period where it is done but in most cases it comes after the Bitcoin halving. The last notable altcoins Season we experienced was in 2021 between the months of may to July.

The first altcoins Season emerge around 2016-2017 where we saw altcoins rising beyond measures and the prices of most of the altcoins raises with about 5x, 10x to upto 50x or more. The altcoins Season is also know as the altcoins bull run.

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As we all know the bull run is a season where crypto make significant pump and a very good example is what we saw between October last year till now. We saw how Bitcoin move from around $30,000 to about $67,000 as at the time of writing this article.

This is a massive movement for Bitcoin and this only occurs during the bull run. So based on this movement, altcoins in most cases also move in same manner. So when we see altcoins moving in this manner we call that season altcoins Season.

Though Bitcoin being the father of all other cryptocurrency, as it is moving many other assets are moving along side but the movement is not too much for the period to be called an altcoins Season hence during this season altcoins perform much more higher than Bitcoin as they can make 5x, 10x to upto 50x or more.

During the altcoins Season we see investors making good profits because it is a period where traders and investors make real money for holding a certain coin for a while. The coin you bought at $5 may raise by 10x giving you about $50 for one which is a very good money made. Imagine if you hold thousands of such a coin.

Factors that determine (identify) altcoins Season

The major factor that determine altcoins Season is Bitcoin dominance and this involves the market capitalization of Bitcoin and the total cryptocurrency market capitalization. So these two factors are what determines altcoins Season.

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Bitcoin dominance refers to the market capitalisation of the Bitcoin token when compared to the market capitalisation of other tokens or cryptocurrency. I will explain this more clearly with an example so that we will have a better understanding of the message I'm trying to pass through.

Bitcoin dominance index = (Market capitalisation of Bitcoin/Market capitalisation of altcoins) X 100

Where;

Market capitalisation of altcoins = (Market capitalisation of Bitcoin + Market capitalisation of altcoins)

So with that in mind let's look at an example so we can apply the given formula.

Mathematical Calculations illustration

Example: The market capitalisation of Bitcoin is given to be $1 trillion and the total market capitalisation of altcoins is given to be $500 billion, what will be the Bitcoin dominance index.

Given;

Market capitalisation of Bitcoin = $1 Trillion

Market capitalisation of altcoins = $500 billion

Bitcoin dominance index = ?

From the above formula;

Bitcoin dominance index = (Market capitalisation of Bitcoin/Market capitalisation of altcoins) X 100

Where;

Market capitalisation of altcoins = (Market capitalisation of Bitcoin + Market capitalisation of altcoins)

Substituting the values in the formula will yield

Market capitalisation of Bitcoin = $1 Trillion

Market capitalisation of altcoins = $1.5 Trillion

Bitcoin dominance index = ( $1 Trillion/ $1.5 Trillion) X 100

Bitcoin dominance index = 66.66%

So anytime we see a drop in this Bitcoin dominance index , we will know that we are entering into the altcoins Season. During 2017, Bitcoin dominance index went below 38% and that was when saw altcoins rising very well. This indicates a potential shift in investment to altcoins.

So if the market capitalisation of altcoins is increasing and the market capitalisation of Bitcoin is decreasing or Bitcoin dominance index is decreasing then we should expect altcoins Season at that period.

Similarly, if the total market capitalisation of altcoins is increasing and the market capitalisation of Bitcoin is not decreasing then it is a fake altcoins Season and investors are advised to watch that season well because there will be lots of fake out during that period.

Conclusion

Altcoins Season is a period where we see sudden raise in the prices of the cryptocurrency other than Bitcoin. These raises are so significant that they are been noticed because they make 5x, 10x, 50x or more of the initial price of the asset. This movement and this period is called the altcoins Season.

Ideally we identify this season using Bitcoin dominance. This means that when the total market capitalisation of of altcoins is increasing and the market capitalisation of Bitcoin is decreasing then we saw we are in the season of altcoins. During this period investors shift some of their money from Bitcoin to altcoins.

Finally, I want to thank you all for reading through my post today. If you have any questions or contributions, please do well to use the comment section of this post. See you all in my next publication.

Disclaimer: ^{This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your research and consult a financial advisor.}