Altcoin Season: Signs of the Beginning of Altseason and Declining Bitcoin Dominance!
2024-12-02
Bittime - Domination Bitcoin is currently in the spotlight of analysts, signaling the possible start of a new cycle in the cryptocurrency market after several months of dominance.
According to data from TradingView, Bitcoin dominance, which measures Bitcoin's market capitalization in the cryptocurrency market, has fallen to 56%, shrinking from 60% in the past month.
This drop suggests that Bitcoin may be in a larger bearish phase.
Decreasing Bitcoin Dominance over Alternative Coins or Altcoins
The analyst also projected that Bitcoin is likely to fall below a long-standing support trendline, which refers to a key technical level that registers a decline in Bitcoin's dominance below a certain threshold.
“Bitcoin dominance appears poised to break through its multi-year support line,” wrote one analyst in a post on X on December 2.
This drop suggests that the market may be preparing for a shift to altcoins.
Impact on Ethereum and Other Altcoins
Domination Ethereum also decreased to 12.9%, following Bitcoin's depreciation.
Meanwhile, the dominance of other cryptocurrencies jumped to 31.5%, up from 28.1% in the past month.
This biggest drop in dominance in the cryptocurrency market has significantly affected market sentiment, indicating that altcoin season, or what is known as Altseason, is near.
It is characterized by dominance that has broken through support for two years.
What is Altseason?
Altseason is a situation where an altcoin experiences a higher price spike compared to Bitcoin, which is the world's leading cryptocurrency.
This usually happens when Bitcoin's dominance declines, and many altcoins start to perform better.
In this period, investors often switch from Bitcoin to altcoins in search of higher returns.
9 Features of Altcoin Season
1. Declining Bitcoin Dominance
Bitcoin's share of the total cryptocurrency market value is declining, indicating that investors are starting to turn to altcoins.
2. Altcoin Price Surge
Significant price increases across various altcoins, often driven by increased investor interest.
3. Higher Trading Volume
Altcoins experience higher trading volumes than Bitcoin on both centralized and decentralized exchanges.
4. Collectively Better Performance
If the performance of the majority of altcoins are collectively outperforming Bitcoin, indicating that the altcoin market is in a bullish phase.
5. Increase in Market Capitalization
The market capitalization of altcoins grew significantly compared to Bitcoin, indicating greater interest in altcoins.
6. Changes in Investor Interest
Investors are moving funds from Bitcoin to altcoins, looking for more profitable opportunities.
7. Positive Market Sentiment
Increased positive news and sentiment surrounding altcoins, often driven by innovation and new developments.
8. Technological Advancement
Innovations or updates in altcoin technology are attracting interest, such as the emergence of DeFi and NFTs.
9. Regulatory Support
Favorable regulatory news increases confidence in altcoins, encouraging more investment. Like the election of Donald Trump, who is considered more pro-crypto than Kamala Harris in the 2024 United States presidential election.
Images: Different phases of the 2021 altcoin season. Source: X (formerly Twitter)
Read too When will Altcoin Season Start in 2024 and 2025? These are the signs!
Why is Altseason Important?
Investments during the altseason can provide high profit potential, portfolio diversification, and early adoption opportunities for new projects.
However, it is important to remember that altseasons also carry risks, including high volatility and liquidity risks.
Investors must be prepared to face rapid price fluctuations and conduct in-depth research before investing.
Strategies for Trading Altcoin in Altseason
1. Portfolio Diversification
Invest in a variety of altcoins to spread the risk and increase your chances of making significant profits.
2. Do In-depth Research
Understand the fundamentals of the project before investing. Look for altcoins with strong use cases and active development teams.
3. Monitor Market Trends
Stay informed about news and trends that may affect the altcoin market. Use tools like social media and market analysis platforms to track developments.
4. Set Clear Entry and Exit Points
Plan when to buy and sell altcoins to lock in profits or minimize losses.
5. Use a Stop-Loss Order
Protect your investment from big losses by using stop-loss, which automatically sells altcoins if their price falls below a certain threshold.
Read too Allseason Predicted to Occur in 2025: This is the Definition and Characteristics
Previous Altcoin Season Case Studies
Altcoin Season 2017: The ICO Boom
In 2017, the cryptocurrency market experienced a significant altcoin season, driven by a surge in Initial Coin Offerings (ICOs).
Ethereum plays an important role as many ICOs are launched on its platform.
This period witnessed substantial price increases for various altcoins, including Ethereum, Ripple, and Litecoin.
1. Ripple (XRP)
Ripple saw its price spike from $0.006 in January 2017 to over $3 in January 2018, driven by partnerships with financial institutions and adoption of its cross-border payments solution.
2. Ethereum (ETH)
The price of Ethereum jumped from around $8 in January 2017 to nearly $1,400 in January 2018.
This growth is driven by the increasing number of ICOs using Ethereum's ERC-20 standard.
3. Litecoin (LTC)
Litecoin Price increased from $4 in January 2017 to around $360 in December 2017, thanks to its reputation as the “silver to Bitcoin's gold” and various technological improvements.
Altcoin Season 2020-2021: The DeFi and NFT Boom
The period between late 2020 and early 2021 marked another significant altcoin season, driven primarily by the explosion of Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs).
This season sees new projects gaining immense popularity and achieving high returns.
1.Axie Infinity (AXS)
This blockchain-based gaming platform saw its token price jump from $0.54 in January 2021 to over $150 in November 2021.
This surge is driven by increasing interest in NFTs and earnings-based games.
2. Chainlink (LINK)
Chainlink, known for its decentralized oracle network, is experiencing substantial growth.
Its price rose from around $2 in January 2020 to over $50 in May 2021, thanks to its crucial role in DeFi applications.
3. Uniswap (UNI)
The Uniswap token increased from $3 in September 2020 to over $30 in May 2021.
This increase was driven by the increasing popularity of decentralized trading and liquidity provision.
Altcoin Season Early 2023: Layer-1 and Layer-2 Solutions
In early 2023, the altcoin market witnessed another surge, with a focus on Layer-1 and Layer-2 solutions aimed at improving the scalability and efficiency of blockchain networks.
1. Avalanche (AVAX)
Avalanche, another Layer-1 blockchain, saw its token price increase from $3 in January 2021 to over $100 in November 2021. P
Its rapid growth is driven by high throughput and the launch of various DeFi projects on its platform.
2. Polygon (MATIC)
Polygon, a Layer-2 scaling solution for Ethereum, saw its price increase from $0.02 in January 2021 to around $2.50 in December 2021.
Its popularity has increased due to its ability to reduce transaction fees and increase transaction speed on the Ethereum network.
3. Solana (SOL)
Solana, a high-performance blockchain, saw its price rise from $1.50 in January 2021 to over $200 in November 2021.
Its growth is driven by fast transaction speeds and low fees, attracting many developers and projects.
Read too Top 12 Layer 1 Cryptos You Should Know: There's XRP and XLM
When Will the Next Altcoin Season Happen?
Through November 2024, analysis shows that the next altcoin season will likely occur from the end of this year to the first quarter of 2025.
This is due to the fact that Bitcoin has hit consecutive record highs in the first two weeks of November, following the US elections. These consistent gains are often followed by short correction periods, where investors tend to liquidate a portion of their Bitcoin holdings to take profits.
For example, on November 15, Bitcoin fell below $90,000, nearly 5% down from its record high just a week earlier.
This drop suggests that Bitcoin holders may be taking short-term profits, which could spark a new altcoin season.
When investors start to shift from Bitcoin to altcoins, this often signals the start of the altseason.
Altcoins to Watch in 2025
Dogecoin (DOGE)
Dogecoin has seen a substantial surge, increasing by 110% in the past week.
This rise was largely fueled by Elon Musk's influence, especially after his humorous remarks about leading the 'Department of Government Efficiency', abbreviated as DOGE.
With Musk now working directly with the Trump administration, pro-crypto and pro-meme coin sentiment will likely influence DOGE prices even more in the next altcoin bull market.
Ethereum (ETH)
As the largest altcoin, Ethereum has always been a frontrunner in the altcoin season.
The latest upgrade to the network, known as Pectra, is scheduled for 2025, which could make Ethereum more scalable.
This increase in efficiency will likely have a positive impact on the price of ETH in the upcoming altcoin season.
Ethereum's smart contract capabilities make it very important in the crypto ecosystem.
Solana (SOL)
Solana has outperformed both Bitcoin and Ethereum this year, with an increase of up to 300% by 2024.
This is due to the surge of Solana coin memes throughout the year.
Additionally, Solana has grown to become the second largest blockchain network for DeFi, after Ethereum, with total value locked (TVL) exceeding $7.5 billion this year, which is the highest since 2021.
Ripple (XRP)
While there has been a lot of doubt and scrutiny surrounding XRP due to its underperformance in previous bull markets, XRP is the most important altcoin to watch in the current market, especially after the 2024 US elections.
The token has risen 60% since the election, reaching its highest price in a year.
Speculation about the possible resignation of SEC Chairman Gary Gensler has increased optimism among investors.
The latest developments in Ripple's legal battle with the SEC suggest that US courts may dismiss or settle many crypto-related lawsuits, including the Ripple case.
This potential resolution could contribute to XRP price appreciation. With regulatory tightening easing, XRP is likely to see strong investment flows in the upcoming altcoin season.
Read too Top 6 Cryptos to Watch in 2025
Conclusion
Altcoin season is an exciting period for investors, with high potential returns and risks to manage.
Understanding the patterns and characteristics of previous altcoin seasons can help investors make better decisions and take advantage of existing opportunities in the market.
By monitoring promising altcoins and following market developments, investors can maximize their potential future profits.
FAQ Signs of the Start of the Altseason
What is Altseason?
Altseason, or altcoin season, is a period where the majority of altcoins experience significant price increases, often outperforming Bitcoin.
During the altseason, more investment flows into altcoins than Bitcoin, which usually occurs after Bitcoin reaches a price peak and stabilizes.
This provides an opportunity for investors to profit from more affordable altcoins.
How Long Does Altseason Last?
The length of altseasons varies, but generally lasts for several weeks to several months.
Typically, an altseason occurs after a Bitcoin bullish period, and can last until investors start reinvesting in Bitcoin or until the market experiences a correction.
When is Altcoin Season 2024?
While there is no certainty about when the altseason will occur, analysis shows that the 2024 altseason will likely start from the end of this year to the first quarter of 2025.
This is triggered by market movements and changes in Bitcoin dominance.
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Reference
Fiqh Zulkarnain, Bitcoin dominance drop and ready to break multi-year support, analyst says, Accessed December 2, 2024
Mohammed Shahid, Altcoin Season Explained: What Is Altseason And How To Capitalize On It, Accessed December 2, 2024
Author: IN
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