In the crypto world, there is a common desire shared by many: a full-blown altcoin season. Altseason refers to a short period during which altcoins outperform Bitcoin. Since the 2021 peak, most altcoins have lost ground against Bitcoin and hit new lows. Crypto expert Sumit Kapoor investigates whether altcoin season is imminent.
‘Altcoin season’ index fell to the lowest level in recent years
The altseason index shows whether we are in a Bitcoin season or an altseason. Currently, this index stands at ten on an annual timeframe. This shows that we are in a Bitcoin season where BTC is outperforming most altcoins. The last time this index was this low was during the C-19 crash in 2020. In the months following this crash, the crypto market entered a DeFi-powered altcoin season.
Historically, when the price of BTC reached its lowest point, it bottomed out. However, this time, due to the SEC’s crackdown on altcoins and Robinhood’s fierce selling, several altcoins have reached new lows despite BTC’s bullish price action in 2023. If history is any indication, most altcoins have probably bottomed. Therefore, it is possible that we will witness an increase in this index in the coming months.
Source: TradingViewInvestor’s dilemma: Code of the crypto market cheating cycle
As you follow from Kriptokoin.com, Bitcoin and altcoins reached new lows during the FTX crash. Thus, it led to traditional media discussing the collapse of the crypto market. FTX was the second largest crypto exchange at that time. So, its crash was a capitulation event for the majority of the crypto market. Following the crash, the crypto market began to recover as it would after a true capitulation. However, the unthinkable happened.
The SEC has begun labeling the largest altcoin projects as securities. This caused many of them to hit new lows. Shortly thereafter, news emerged that Robinhood had begun selling these altcoins, which are defined as securities by the SEC, causing the market to crash even further, resembling an actual capitulation. Following the XRP victory, all these cryptocurrencies experienced significant price increases. But they still haven’t reached new lows. This shows that the SEC news points to the real capitulation event. It also signals that most altcoins have discovered their true bottoms.
Source: TradingViewBTC dominance grows, but altcoin opportunities remain
After reaching its peak in June 2023, BTC dominance has been steadily declining. This is a positive development for the altcoin market. The decline in BTC dominance shows that new funds flowing into cryptocurrencies are experiencing smaller losses than Bitcoin. Despite the news regarding Grayscale, BTC dominance has not increased significantly.
BTC’s Mt. Gox and sales of BTC by the US government, both of which will make it difficult for BTC dominance to rise, this trend is likely to continue. The only factor that could potentially increase BTC dominance is FTX’s plan to sell its holdings, as announced a few weeks ago. FTX holds a significant amount of SOL, ETH, and other top cryptos. Considering that the overall crypto market volume is at the lowest levels in recent years, it is possible that such a sell-off could cause significant damage to the altcoin space.
Source: TradingViewNavigating altcoin capitulation
Numerous factors indicate that these cryptocurrencies are capitulating. We have probably already witnessed the depression phase. This does not mean that altcoin projects will rise tomorrow or next month. But it does show that many altcoins have reached a price level where those planning to hold for the long term may consider dollar-cost averaging (DCA).
Remember that there are still many unknowns, such as an impending recession or other unpredictable black swan events that a chart cannot predict. So always include these factors in your plan.
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