When Will Altcoins Pump and the Altseason Begin

Altcoins have been known to pump in cycles, with some analysts suggesting a pattern of every 2-3 years. This cycle is based on historical data, which shows that altcoins tend to follow a similar pattern of growth and decline.

The current market conditions, including low prices and high volatility, could be a sign that an altseason is approaching. As one article section notes, "low prices can be a buying opportunity" for investors looking to get in on the ground floor.

However, predicting exactly when altcoins will pump is difficult, if not impossible. This is because the cryptocurrency market is highly unpredictable and influenced by a wide range of factors.

Altcoin pumping can be triggered by various factors, but one key driver is the hype surrounding a new project or technology. This hype can create a self-reinforcing cycle where investors buy in, driving up prices, and further fueling the hype.

Social media platforms play a significant role in spreading the hype, with influencers and enthusiasts sharing their excitement and predictions with their followers. This can lead to a surge in interest and investment in the altcoin.

In some cases, the hype is fueled by partnerships or collaborations with established players in the industry, which can lend credibility and legitimacy to the new project.

The altcoin season is a period when cryptocurrencies other than Bitcoin outperform the king of crypto, and experts claim it may be already in full force. According to VanEck experts, the relationship between Bitcoin dominance and altcoin performance can be explained through the cyclical nature of capital flows in cryptocurrency driven by investor psychology.

For altcoin pumping to occur, Bitcoin dominance needs to drop, potentially allowing altcoins to recover strongly. History tells us the candle that starts tomorrow is for altcoins, as crypto analyst TechDev 52 pointed out.

For more insights, see: Altcoin Dominance

The ETH/BTC ratio is considered a barometer of the health of altcoins, and it has bottomed as BTC.D struggled, suggesting that a rebound for the altcoin season is on the horizon. SwissBlock noted that Bitcoin's dominance is losing steam, and ETH/BTC has printed a higher low, possibly signaling a bottom.

According to the Altcoin Season Index, altcoins are doing reasonably well, with a current score of 0.64, suggesting a moderate altcoin performance. However, the index is not yet at the 0.6 cutoff value that signals the start of the altcoin season.

The start of the altcoin season is often preceded by a period of increased appetite for risk, motivating investors to seek higher-risk, higher-reward opportunities in altcoins. This is especially true for nascent crypto sectors, such as decentralized finance (DeFi), gaming, and non-fungible tokens (NFTs).

Broaden your view: Altcoin Season

Bitcoin's strength can be attributed to its perceived value as an inflation hedge, even if it hasn't worked as well in recent times. Inflation is up, and the Federal Reserve is raising interest rates to cool price hikes.

Institutional investors are more comfortable with bitcoin due to its battle-tested history, lower volatility, and larger market size compared to altcoins. They've been buying bitcoin's dip, as seen in on-chain data.

The crypto market follows a natural cycle, where bitcoin soaks up altcoins during bear markets. Investors favor bitcoin's relative price stability during these times.

At the start of bull markets, investors tend to favor bitcoin first, followed by larger protocols like Ethereum and Solana. This is because they're inclined to take more risks after profiting from safer investments.

An altseason is a period when cryptocurrencies other than bitcoin (altcoins) outperform the king of crypto. This happens when bitcoin dominance is trending down, meaning altcoins are mostly going up in value versus bitcoin.

The chart of bitcoin's market size as a percentage of the broader crypto market (bitcoin dominance) shows when altseason is happening. When the ratio is trending down, it's time to consider holding a spread of smaller-sized cryptos instead of just bitcoin.

Historically, altseasons follow after bitcoin dominance peaks near 60%. Traders seek higher returns in alternative assets, and new capital enters the market during bitcoin's rise, encouraging a "risk-on" sentiment.

Increased appetite for risk often benefits more nascent crypto sectors, such as decentralized finance (DeFi), gaming, and non-fungible tokens (NFTs). The "altseasons" are identified when over 60% of the top 50 altcoins by market cap, excluding stablecoins and bitcoin-backed assets, outperform bitcoin over a 90-day period.

Data from Artemis's Altcoin Season Index suggests that altcoins are doing reasonably well, with a current score of 0.64. This indicates a moderate altcoin performance, a sign of a major altcoin pump still ahead.

The current state of the cryptocurrency market is neither altcoin season nor bitcoin season, according to CoinMarketCap. The platform uses a more stringent standard for calculating the altseason index, which is defined as 75% of the top 100 altcoins outperforming bitcoin.

Discover more: Top 20 Altcoins

Bitcoin's strength is largely due to its perceived status as the best inflation hedge in crypto, despite recent struggles.

Inflation is on the rise, and the Federal Reserve is raising interest rates to combat it, which is actually benefiting Bitcoin.

Institutional investors are more comfortable with Bitcoin than smaller-cap altcoins, thanks to its battle-tested history, relative price stability, and larger market size.

The crypto market follows a natural cycle, with Bitcoin soaking up altcoins during bear markets and altcoins outperforming Bitcoin during bull markets.

Historically, investors tend to favor Bitcoin's relative price stability during bear markets, and then move on to more speculative altcoins during bull markets.

The end of 2020 saw Bitcoin surge from $10,000 to $40,000, while altcoins lagged behind.

In the first quarter of 2021, Bitcoin went from $40,000 to over $60,000 while altcoins multiplied and multiplied.

Bitcoin dominance (BTC.D) could drop in January, potentially triggering the altcoin season rebound, according to crypto analyst TechDev 52.

A rejection at the long-term trendline resistance could lower BTC dominance, allowing altcoins to recover strongly.

The ETH/BTC ratio has bottomed, suggesting a rebound for the altcoin season is on the horizon.

Some select altcoins, like Virtual Protocol and Gate Token, have performed well in the past week, despite the overall market weakening.