Altcoin season: there’s who thinks it is about to arrive

When a Bitcoin bullrun begins, many start to wonder if it will be followed by an alt-season (altcoin season), or not. 

In reality, the current bullrun, which might not have concluded yet, has already recorded some interesting performances of altcoins, but of very short duration and without new highs. 

How to recognize an altcoin season

It is defined as altcoin season, or alt-season, a period in which altcoins outperform Bitcoin as a whole. 

So if the period is very short (one or two days), or if only some altcoins outperform BTC, it cannot be defined as a true alt-season. 

The indicators worth monitoring to try to understand if an alt-season is starting are particularly two. 

The first is the trend over time of the price of Ethereum expressed in Bitcoin (i.e., the trading pair ETH/BTC).

For example, during the alt-season of the first half of 2021, the price of ETH in Bitcoin at one point skyrocketed from 0.030 BTC to 0.077 BTC within a month and a half. 

Then, after rising to 0.085 BTC at the peak of 2021, a long descent began that might not be over yet. 

The second indicator is the dominance of Bitcoin.

At the beginning of 2021, it had reached 70%, but then during that alt-season, it fell to 40%. After moving sideways around 40% for about a year, it then started to rise, and this rise seems to be still ongoing. 

Is the alt-season already underway?

There is also a specific indicator, the Altcoin Season Index by CoinMarketCap, which is currently at 54 points.

This indicator, which ranges from 0 to 100 points, indicates a true altcoin season when it exceeds 75 points. 

Note that until mid-September this indicator was almost constantly below 25 points, meaning in the Bitcoin-season zone. Subsequently, it was consistently below 50 points until November 24, meaning until last week. 

Starting from Monday, November 25, it went above 50 points, but effectively remained in the neutral zone. 

There are two other parameters that clearly indicate that we are not yet in a true alt-season. 

The first is the price ratio of Ethereum to Bitcoin, which fails to surpass 0.040 BTC even though it tried on Sunday, bouncing back below that threshold in a very short time. 

The second is the dominance of Bitcoin, which remains consistently above 58%.

Will an altcoin season arrive?

The fact is that there are several analysts who believe that the price of Ethereum is ready for a breakout.

It should not be forgotten that in March it managed to exceed $4,000, and that since July it has not been able to consistently stay above $3,500. 

In the last month, it has already risen significantly, going from $2,400 to about $3,500, but without being able to break through this wall. 

The point is that, should it manage to break through it with momentum, it could aim for $4,000 again, and this in theory could also suggest the hypothesis of the start of an altcoin season. 

The problem, however, is that even the growth of the Bitcoin price might not have concluded yet. 

So if Ethereum were to rise, but in line with Bitcoin or maybe even less than BTC, the price ratio of ETH to BTC might still not increase. 

Furthermore, the recent price increases of some altcoins, which have brought the Altcoin Season Index of CoinMarketCap just above 50 points, seem to have already run out, so it is not even certain that the level of this index can remain above 50 points for long. 

In order for a true altcoin season to begin, it is necessary for Ethereum to outperform Bitcoin significantly, breaking through the 0.040 BTC barrier abundantly and powerfully, and for Bitcoin’s dominance to drop at least towards 55%, or even lower. 

At this moment such signals are not present, and they are not even in sight, and it might be necessary to wait for the Bitcoin bullrun to stop, or slow down for a while, before they can re-emerge. 

The positive forecasts

Having said that, according to some analysts, the growth of BTC could stop or slow down near $110,000, which is not a particularly distant figure. 

If things really went that way, at that moment another mini-altseason like the one from the past few days could start, and it cannot be ruled out a priori that such a mini-altseason could trigger a true altcoin season, perhaps a short one. 

It’s advisable to keep an eye on the Altcoin Season Index by CoinMarketCap, because if it approaches 75 points, it means that the probabilities of an alt-season increase.