These days, you must also have an account called “Alt Season”. Digital currencies have you heard But what is alt season and how do we know that it has started? In the following, while answering these questions, we have a look at the indicators and signs of the beginning of the alt-season and the factors affecting it. Finally, we will see how to get the most out of the alt season.
What is Alt Season?
Alt season is called a period when the capital from Bitcoin (BTC) is transferred to altcoins or cryptocurrencies other than Bitcoin, and this transfer causes the price of many altcoins to grow rapidly and dramatically. This period, commonly known as the “alt season,” is characterized by high volatility and significant gains, and can be an exciting time for investors.
During the altseason, which usually lasts a few weeks or months, cryptocurrencies other than Bitcoin grow strongly. This growth is often due to the FOMO (fear of missing out) phenomenon that attracts new investors to buy altcoins.
What is the reason for the start of the alt-season?
After a significant increase in the price of Bitcoin, its price usually stabilizes and moves sideways. These conditions lead investors to look for more profitable opportunities. They usually exchange their bitcoins for other altcoins, which will reduce bitcoin’s share of the total market and eventually lead to the start of altseason.
History of previous altseasons
In the previous altseasons, we saw a sharp increase in the price of many altcoins. Especially in the years 2018-2017 and 2020-2021, we saw such growth. These periods, along with their own historical trends, also set similar trends for altcoins, which we explore here.
- 2018-2017: This altseason was accompanied by a decline in Bitcoin dominance from 86.3% to 38.69% at the beginning of 2018. Also, the price of Bitcoin fell from its all-time high of over $20,000 to less than $6,000 in a matter of months. During this period, ICOs flourished and many projects Blockchain They raised funds through the sale of tokens.
- 2021-2020: The 2021-2020 altseason began during the Corona pandemic, when investors were looking for new opportunities outside of the Bitcoin world. This period witnessed the unprecedented growth of meme-like coins Dogecoin and Shiba was and Non-Fact Tokens (NFT) were also highly regarded.
How do we know that the alt-season has started?
Indicators and signs of the beginning of the alt-season
1. Analysis of Altseason index
The Altseason Index is an important tool for evaluating the overall situation of altcoins in the market. This index usually includes a combination of various factors such as trading volume, the number of top altcoins, and the market ratio of altcoins to Bitcoin. If the alt-season index increases continuously, the probability of the alt-season starting increases. However, it is better to combine this indicator with other indicators to draw more accurate conclusions.
2. Increasing dominance of altcoins
One of the main signs of the beginning of altseason is the increasing dominance of altcoins over Bitcoin. When the percentage of dominance of altcoins in the whole market increases, it means that investors pay more attention to these currencies. Reasons for this increase could include more confidence in new projects, technical innovations or effective advertising.
3. Increasing the volume of altcoin transactions
The increase in the volume of transactions is another important indicator of the beginning of the alt-season. When the trading volume of altcoins increases significantly, this indicates increased investor activity and increased liquidity in the market. This increase in volume can lead to more price volatility and more investment opportunities.
4. Technical analysis and price charts
Using technical analysis tools can help identify the upward trends of altcoins. Chart patterns such as “ascending triangle”, “ascending flag” and “breakout of resistance” can be signs of the beginning of an alt-season. Also, technical indicators such as RSI (Relative Strength Index) and MACD (Moving Average Convergent Divergent) can show the direction of the market.
5. News and important events
Positive news related to altcoin projects, such as the introduction of new technology, strategic collaborations or listings on reputable exchanges, can have a great impact on the start of the altseason. Also, changes in laws and regulations can also have an impact.
6. Market sentiment and social media
Analyzing market sentiment through social media and news platforms can indicate investor interest and confidence in altcoins. An increase in discussions and positive exchanges on social networks such as Twitter, Telegram and Reddit can be a sign that the alt-season is approaching.
Factors affecting the beginning of the alt-season
1. Economic changes and interest rates
Changes in economic policies, especially interest rates by central banks such as the US Federal Reserve, can have a huge impact on the cryptocurrency market. Lower interest rates may prompt investors to seek riskier opportunities such as altcoins.
2. Stabilization or decline in the price of Bitcoin
Sometimes, a stabilization or decline in the price of Bitcoin can lead to the start of an alt-season. As Bitcoin enters a price stabilization phase, investors may look for new opportunities in altcoins.
3. Technological innovations in altcoins
New projects and technological innovations in altcoins can increase the attractiveness of these currencies. For example, introducing advanced smart contracts, improving scalability or increasing security can help altcoins grow.
4. More acceptance of altcoins in everyday transactions
Increasing acceptance of altcoins by online stores and services can play an important role in increasing demand and thus increasing their prices.
Is the next altseason near?
It is very difficult to predict the exact time when the altseason will start, because the digital currency market is highly volatile and influenced by many factors. However, some indicators and factors can indicate that this period is close:
- Altseason index analysis: If the alt-season index is increasing and approaching its historical levels, the probability of the alt-season beginning increases.
- Economic changes: Interest rate reduction or positive changes in economic policies can be effective.
- Technological developments: The introduction of new projects and technologies in altcoins can be a trigger for the start of altseason.
- Technical analysis: Positive technical signals in altcoin charts can be a sign of the beginning of altseason.
Considering the complexities and fluctuations of the market, it is recommended that investors always perform comprehensive and diverse analyzes and use different tools to evaluate the market situation. Also, risk management and having appropriate strategies are very important.
How to benefit from Altseason?
To take advantage of the alt-season, it is important to identify opportunities before the period begins.
- Research and portfolio diversification:
First, identify the right altcoins to buy and ensure that your investments are diversified. This can reduce risk and increase potential returns. - Correct timing for check-in and check-out:
Using technical analysis tools such as support and resistance levels and relative strength index (RSI), you can identify the right times to enter and exit the market.
Frequently asked questions about Alt-Season
1. What is the alt-season index?
The AltSeason indicator helps you evaluate the performance of altcoins compared to Bitcoin. When this indicator rises, it means that altcoins are surpassing Bitcoin and the altseason has begun.
2. How can I predict when altseason has started?
By analyzing market cycles and using indicators such as Bitcoin dominance, trading volume and technical indicators, you can predict that the alt-season has begun.
3. How is the alt-season cycle?
The alt-season usually begins when Dominance of Bitcoin decreases and investors are looking for profitable opportunities in altcoins.
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