Alt Season Is Just Getting Started!
What a year 2021 has been for cryptocurrency in general.
The massive highs reached in the beginning of the year with both BTC and Altcoins has somewhat retraced through the last month of turbulence. Or has it?
With BTC’s consecutive daily closes above $45,000 USD, the total cryptocurrency marketcap is the highest it has been since May, bouncing back to an eyewatering $1.9 Trillion. This is leading some traders to believe that potentially, a new altcoin season has begun. Let's take a look.
What is Alt Season?
The cryptocurrency market is, of course, dominated by Bitcoin and consequently the performance of Bitcoin has an underlying impact on the performance of the rest of the market.
Altcoin season (Alt Season), is that magical time of the bull market where the money flowing into altcoins is faster than the flow into the more dominant king of crypto, Bitcoin.
So, in the literal sense, when more people are investing into Altcoins rather than bitcoin - “Alt Season” is upon us!
Why Does this Occur?
To help better understand the reason for this to occur, we again need to look back into Bitcoin.
Around every 4 years Bitcoin has what is known as the “Bitcoin Halving”. When this occurs, the reward given to Bitcoin miners is reduced by 50%. This quadrennial event decreases the amount of currency mined with each block and in turn, increases scarcity and ultimately creates more value.
Every previous halving event has signaled a massive bull run for bitcoin in the years after. As bitcoin becomes profitable again, the price continues to rise, gains further mainstream attention and a rush of retail investors FOMOing in leading to a further price explosion. Oftentimes, Alt Season will follow an exponential move in the price of BTC.
Naturally, Bitcoin will not continue to rise forever and when the selling pressure outweighs the buyers, the price will eventually go down.
Now the key question that we want to know is… Where does that money go?
The beautiful thing about the psychology of most traders is they like to keep their money invested in the cryptocurrency space but diversifying their portfolios into alternative assets, i.e Altcoins.
In summary, Alt Season will follow an exponential move in the price of BTC as traders move profits and seek out higher returns.
Are We Seeing A New Phase of The Bull Market?
BTC Dominance Falling
BTC has held a very long shadow over the market for as long as cryptocurrency has existed as the king of crypto, but currently BTC dominance has fallen to just below 50%. Despite this, Bitcoin is still pushing for a new 3-month high with excellent support on the 200 day moving average and shows no sign of slowing down.
Altcoins Starting to Rally
Increasing Altcoin dominance in the current crypto space will see prices continue to increase even when the price of BTC has lost its momentum. Altcoins throughout the market continue to see some massive gains on the daily charts as the rally continues to show no sign of letting up.
This week alone we have seen Cardano (ADA) achieving a massive 40% increase, Binance Coin (BNB) with 12%, and the community coin 100x has seen explosive gains of 20%, plus a 10% gain in the previous 24 hours at time of writing.
Increasing Cryptocurrency Adoption
With cryptocurrencies dominating headlines with the likes of Doge, BTC, Ethereum and with an ever-growing list of real-world applications, crypto is here to stay. The media coverage has been significant over the last 8 months around cryptocurrency, with current regulations in the US continuing to push crypto to the front page.
We have celebrities, influencers and billionaires like Elon Musk and Michael Saylor impacting the price of the markets, albeit not with the same effect as we've seen before.
There is no denying that cryptocurrencies are going to continue to make headlines around the world, reaching more potential investors, more wallets being created, pushing the marketcap to new-found levels.
What This Means For The Rest of 2021 And The Current Cycle
As awareness of cryptocurrency continues to grow, BTC continues to make headlines with its massive push to return to an all-time high, Altcoins across the board are set for a massive rally, the likes of which we may have not seen yet (NFA, of course).
If the last week in cryptocurrency has proven anything, it is that the current Alt Season and the bull market is far from over and some might even say we have only just begun.
Want to buy Altcoins, like 100xCoin for example? Download 100xAltbase. Just search Altcoins or Altcoin Exchange in the Play Store! (Yes, soon iOS).