Data suggests that the crypto market may be approaching the next altcoin season
In the midst of the ongoing crypto winter, most investors are looking for indicators and patterns to guide their entry and exit from the market while trying to maximize their profits. One of the patterns being watched is the altcoin season for alternative currencies known as altcoins, with indicators suggesting that this period could be on the cards.
Notably, as of September 19, 69% of the top 50 coins have outperformed Bitcoin (BTC) over the past 90 days, highlighting that the “altcoin season” is underway, according to Blockchain Center data.
In particular, according to the Blockchain Center Altcoin Season Index, an altcoin season is declared when 75% of the top 50 coins outperform Bitcoin over three months (90 days). The overview coins exclude stablecoins and asset-backed cryptocurrencies.
Bitcoin records negative returns
Among the top 50 coins, liquid staking solution for Ethereum (ETH), LIDO (LDO) is the highest performing altcoin at 222.4% in 90 days, followed by Chiliz (CHZ), the token that powers the Socios.com fan voting platform with 154.6%. Elsewhere, Bitcoin has recorded losses of 6.6% over the period.
It is worth noting that the ‘altcoin season’ refers to a phase in the cryptocurrency market when altcoins outperform Bitcoin. However, this does not mean guaranteed profits due to factors such as market volatility. Therefore, the season offers an opportunity for crypto investors to diversify their portfolios.
In most cases, altcoins usually perform better during a bull market. Therefore, a significant number of altcoins outperforming Bitcoin could suggest a potential rally for both assets.
At the same time, previous altcoin seasons have coincided with Bitcoin registering high market dominance. In most cases, the altcoin season is usually characterized by investors moving their capital from Bitcoin to other assets.
Bitcoin’s Declining Dominance
In this case, an opportunity for altcoin season is potentially exhibited by Bitcoin’s market dominance, which has waned in recent days as capital has flowed into other products. According to CoinMarketCap data, Bitcoin dominance is 39.3%.
Furthermore, as investors monitor potential signs of an altcoin season, emphasis is placed on proper entry and exit timing. In particular, late entry or exit usually spreads risk to trading strategies.
Meanwhile, Bitcoin continues to struggle, consolidating around the $20,000 level. At press time, the flagship cryptocurrency was trading at $18,600 with a loss of nearly 7% in the past 24 hours.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
