The recent fluctuations in Bitcoin have prompted many traders to look for signals of an upcoming altcoin season, and a post by crypto analyst Crypto Nova provides an alternative perspective on when this phase might truly commence.
Her analysis, backed by charts from 2017 and 2021, indicates that altcoins typically perform best when Bitcoin’s price is already on the rise, rather than after it hits its maximum value. The illustrations she presented demonstrate how previous cycles played out and emphasize the critical timing of Bitcoin’s increase each time.
Altseasons Emerge During Bitcoin’s Strongest Rallies
This perspective contrasts with the expectations of numerous crypto analysts, who have been anticipating a decline in Bitcoin dominance marked by a shift of funds from Bitcoin to the altcoin markets.
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Nevertheless, thorough technical analysis indicates that the most significant and explosive altcoin seasons have not occurred after Bitcoin finished its rallies. Rather, they developed while Bitcoin was consistently achieving new price highs.
The 2017 cycle exemplified this phenomenon most clearly. Bitcoin dominance started to fall during an altcoin season, even as BTC rose from approximately $1,000 to nearly $20,000. The chart depicts a dramatic drop in dominance from 95% in early 2017 to under 40% in early 2018, coinciding precisely with Bitcoin’s significant increase. Altcoins began to outperform Bitcoin well before it peaked just below $20,000.
A comparable trend occurred in 2021. Bitcoin dominance peaked in January and began to decline as the price climbed from around $30,000 to its mid-cycle high above $60,000. Although altcoins took a bit longer to respond compared to 2017, their strongest performance still coincided with Bitcoin’s sharp ascent, not after it stalled or reversed.
The charts below clearly illustrate this relationship: dominance decreases while Bitcoin prices continue to rise.
Bitcoin Requires A Confirmed Bottom And A Renewed Rally
Nova pointed out that traders often err by concentrating solely on Bitcoin dominance without accounting for the larger market context. It’s essential to recognize that dominance does not fall just because Bitcoin remains stagnant or reaches a peak.
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Instead, dominance tends to decline primarily during a robust, sustained upward trend in Bitcoin, while the altcoin sector experiences greater inflows relative to the leading cryptocurrency. This suggests that an altcoin season is unlikely to initiate until Bitcoin establishes a confirmed bottom and encourages inflows into altcoins.
As the analyst noted, Bitcoin is currently in a downtrend, and without a trend reversal, dominance figures alone cannot drive altcoin momentum. This viewpoint challenges the often-repeated assertions circulating online that an altseason is imminent or already underway.
As it currently stands, the crypto market is still in a Bitcoin season, with the CMC altcoin season index at 19 and the CMC Bitcoin dominance sitting at 58.7%.
Featured image from Adobe Stock, chart from Tradingview.com
