Why alts don’t move: Understanding Altcoin season

Many people here ask why alts stopped moving when BTC started it‘s run back to the ATH, I really hope no one panic sells and you are all aware of fomo. Same could be observed when the DOGE craze happened.

That‘s why I want to explain a basic concept in crypto many newer investors aren‘t aware of: The BTC/ Altcoin seasons.

In the earlier days, when the altcoin market was much smaller and Bitcoin had a market dominance of over 90 %, crypto basically meant bitcoin since the media and mainstream didn‘t know about any other coins or tokens.

But back then, it was observed that while of course the whole market makes gains when bitcoin does since most trading pairs are and were with BTC on the exchanges, many altcoins outperformed BTC very heavy right after it stopped moving and that alts in general always performed best right after a BTC bullrun.

The explanation is quite simple: When BTC moons, fresh money and new people get into the crypto space through media attention and fomo, then it stopps at some point and suddenly many people panic sell their BTC. But they have made the step to learn about the blockchain, register to exchanges, many dig deeper and learn about alts.

So a big part of the new people don’t cash out, but trade their BTC to alts. Therefore the back then compared to BTC very low cap alts mooned more then Bitcoin. There was not one BTC bullrun, but ‚seasons‘, usually it was said that if 75% of the Top 50 coins performed better than Bitcoin over the last season (90 days) it is officially Altcoin Season and everyone who knew about that concept got into altcoins, if Bitcoin got back dominance, they got back into BTC and so on.

Since this concept got more famous and many people waited for the alt seasons to invest since the gains were much higher and the outcome easier to foresee, the effect was even stronger.

For your interest, you can still find the ‚altcoin season index‘ here, but as I explain in the following paragraphs, I think it‘s outdated for today’s crypto market: https://www.blockchaincenter.net/altcoin-season-index/

Since alts make about half of the crypto market cap now, BTC is not the only coin to bring new people into the crypto space anymore. There is also heavy media coverage about DOGE, SHIBA, ADA, SOL and some others now and everyone knows that there is more than one crypto coin and NFTs. Bitcoins dominance gets lower, but it‘s still 50 % of the whole market. But I‘d say, there are some more coins today that bring new people to crypto.

I personally think we have a few more seasons now, it‘s like there are some groups of coins and tokens that moon together or after each other during their seasons. Seasons are also shorter, sometimes only a few days. We have a BTC, ETH, ETH Killers (SOL, ADA, DOT, …), DEX/ CEX (UNI, FTX, SUSHI), Doge/ Elon (DOGE, SHIBA, SAFEMOON, …), NFT season and so on. But that‘s another story.

Basically, it‘s not that static and easy anymore, we don‘t have these simple duality of two interchanging seasons, alts are much more dominant now and many new investors never own any BTC.

But the old rule that alts moon after BTC mooned still works in my opinion. All the fomo-focus is on BTC now, after it stopps, many people will swing their BTC into alts. Same goes for any other big media coverage crypto event, no matter if it‘s a dogecoin or a jpg of a rock.

So there is no reason to panic sell or fomo into BTC now, just wait, hodl and relax.

This is only my opinion, not financial advice.

EDIT: This is not a repost, the original thread was auto deleted because it had BTC in the title and there are too many BTC threads right now, I posted it again with another title because it is in fact not about BTC, but the whole crypto market.