How do you recognize that old coin season is?
While the cryptocurrency market is heating up, a recurring question has mastered the matters of the dealers: are we in an old coin season?
The term describes a certain market phase in which alternative cryptocurrencies (old coins) develop better over a longer period of time than Bitcoin. Early recognition of this shift can help investors to change their strategies and benefit from momentum.
What defines Altcoin season?
According to the CMC Altcoin Season Index, it is officially altcoin season if 75 % of the top 100 coins (without stable coins and wrapped tokens) have better performance than bitcoin in the past 90 days. This threshold reflects a wide market rotation away from the Bitcoin dominance to a diversified old coin growth.
The Altcoin Season Index is currently 33/100, far from the 75-point threshold. The market is thus in a Bitcoin-dominated phase, but the latest upward movement of the index (from 26 last week to 33 today) indicates early rotation dynamics.
Important signs that the Altcoin season started
- Increased altcoin dominance
- In earlier Altcoin season-like the one in May 2021-the entire market capitalization of the 100 most important old coins 130% of those of Bitcoin. This expansion signals increased capital inflows in old coins.
- Fast price increase
- Altcoins often record dramatic price gains within a short period of time. At the beginning of 2021, Large-Cap-Altcoins achieved average returns of 174 % and thus far exceeded the modest growth of Bitcoin of 2 % in the same period.
- Fomo and trade frenzy
- High 24-hour trade volumes and a strong upward mood usually accompany the Altcoin season. Optimism leads to an increased purchase pressure, which further heats up the price dynamics and attracts new participants.
- What do the current data show?
Although we are not yet officially located in the Altcoin season, the recent increase in index indicates an increasing interest of investors in old coins. If the trend continues and the index exceeds the 50s mark, this could be the beginning of a wider Altcoin rally. For the time being, Bitcoin remains dominant, but experienced dealers are already observing tokens with strong fundamental data or hype potential-only in the event that the old coin euphoria returns.
