The last major bull run in the crypto market was marked by an incredible altcoin season (or alt season).
For example, while the price of Bitcoin has risen from around $10,000 to around $70,000, or +600% in just over twelve months, there have been smaller cryptocurrencies that have registered four- or even five-digit percentage increases, sometimes in mere seconds. a few months.
In other words, the 2021 speculative bubble focused on altcoins, though not all of them, and literally blew some of them.
Perhaps the most notable case was that of Shiba Inu (SHIB), which went from $1 million to $88 million in six months.
The Altcoin Seasonal Index
A chart called Altcoin Season Index is posted on BlockchainCenter.net which precisely measures the relationship between Bitcoin price performance and altcoin price performance.
In November 2020, this incidence was at its lowest, partly because Bitcoin dominated the crypto markets at the time, and it was BTC price growth that triggered the bull run.
But it wasn’t until five months later that the situation was reversed, with a high showing very well that it was altcoins that were making the market at the time.
However, the Altcoin Season Index is far too volatile, which means it is only good for following short-term trends.
In fact, it had already returned to the lows in August 2021, and five months later it had surged again.
On the other hand, it is an index that compares daily performance, and these in crypto markets are very volatile.
Another issue is Bitcoin’s dominance, which is the percentage of the total crypto market capitalization occupied by BTC’s capitalization alone.
This is a parameter that moves very slowly, because the different price developments of different cryptocurrencies are often very similar.
While the Altcoin Season Index measures the differences between these trends on a day-to-day basis, Bitcoin’s dominance better measures their differences over the long term.
According to CoinMarketCap data, Bitcoin’s dominance was around 58% in October 2020.
During the very early phase of the bull run, specifically through January 2021, it had risen as much as 70%.
At that time, the prices of some altcoins also started to rise significantly.
In fact, already in March it was 60% again. But that was still higher than in October 2020.
The real altcoin season kicked off in April, as BTC’s dominance began to decline. In fact, by the following month it was down to 39%. So in less than five months it was cut in half.
Then, for the rest of the bull run, it never managed to get above 50%, and with the bear market of 2022, it had actually fallen again, falling to 38% in November last year.
So, as of May 2021, the balance of power between Bitcoin and altcoins in the crypto markets had remained essentially unchanged until a few days ago.
The beginning of the Bitcoin season
While a new Bitcoin season had already begun for the Altcoin Season Index back in April this year, dominance had to wait until June to be confirmed.
To be fair, Bitcoin’s dominance started to rise as early as January, but had only bounced back above 40%. In fact, until March it hadn’t even managed to rise back to 43%, though it rose to 47% in April.
At the end of March 2023, it was clear that Bitcoin was once again at the forefront of the crypto markets, but final confirmation came only recently.
Until June 5, Bitcoin’s dominance was still below 46%, but from June 6, a growth phase began that still seems to continue.
On June 10, it was approaching 48% and by June 16, it was surpassed.
In the last two days it was over 49% and now it is approaching 50%.
Note that this figure changes depending on who is measuring it, as different criteria are used. For example, for CoinGecko it is still below 49%, while for TradingView it is close to 51%.
In any case, everything indicates that Bitcoin has become the absolute protagonist of the crypto markets again since April and that altcoins have played an absolutely subordinate role for a few days.
Predictions about the future of the altcoin season
Similar dynamics have occurred before.
When Bitcoin season starts during a bear market, or shortly after, it usually lasts until after the halving. The next halving will take place in the spring of 2024.
So it is possible that the Bitcoin season will last another year, and it is possible that it will always be the price of BTC that triggers a possible new bull run.
However, when Bitcoin’s price growth starts to slow down slightly, altcoins may rebound, triggering a new altcoin season.