Data suggests the crypto market may be approaching the next altcoin season
Amid the ongoing crypto winter, most investors are looking for indicators and patterns to guide their entry and exit from the market while trying to maximize profits. One of the patterns being watched is altcoin season for alternative currencies known as altcoins, with indicators suggesting this period could be on the cards.
In particular, as of September 19, 69% of the top 50 coins have outperformed Bitcoin (BTC) over the past 90 days, highlighting that “altcoin season” is in play, according to Blockchain Center Data.
Notably, according to the Blockchain Center Altcoin Season Index, an altcoin season is declared once 75% of the top 50 coins outperform Bitcoin over three months (90 days). Coins shown exclude stablecoins and asset-backed cryptocurrencies.
Bitcoin Records Negative Returns
Among the top 50 coins, the liquid staking solution for Ethereum (ETH), LIDO (LDO) is the best performing altcoin at 222.4% in 90 days, followed by Chiliz (CHZ), the token powering the trading platform. Socios.com fan vote at 154.6%. Elsewhere, Bitcoin posted losses of 6.6% over the period.
It should be noted that “altcoin season” refers to a phase in the cryptocurrency market where altcoins outperform Bitcoin. However, this does not translate into guaranteed profits due to factors such as market volatility. Therefore, the season provides an opportunity for crypto investors to diversify their portfolios.
In most cases, altcoins usually perform best during a bull market. Therefore, a significant number of altcoins outperforming Bitcoin could hint at rally potential for both assets.
At the same time, previous altcoin seasons have coincided with Bitcoin registering strong market dominance. In most cases, the altcoin season is usually characterized by investors moving their capital from Bitcoin to other assets.
Bitcoin’s plunging dominance
In this case, a possibility of an altcoin season is potentially exposed by the dominance of the Bitcoin market, which has declined in recent days as capital has flowed into other commodities. According to data from CoinMarketCap, Bitcoin’s dominance stands at 39.3%.
Additionally, as investors watch for potential signs of an altcoin season, the focus is on timing the right entry and exit. Notably, a late entry or exit usually spreads risk across trading strategies.
In the meantime, Bitcoin continues to struggle, consolidating around the $20,000 level. At press time, the flagship cryptocurrency was trading at $18,600 with losses of nearly 7% in the past 24 hours.
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