Altcoins

Can Traders Expect Altcoin Season in 2022? Here’s What Metrics Say

Written by: Elena R

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Elena R

Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.

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Jul 12, 2022

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The idea of crypto seasonality holds that the broader crypto market will be significantly impacted by Bitcoin’s cyclical ups and downs. It is referred to as “Bitcoin season” when Bitcoin starts to rally, taking control of the price charts and outperforming altcoins for an extended period of time.

Additionally, an “altcoin season” or “alt season” occurs when alternative cryptocurrencies outperform Bitcoin for a sizable period of time.

When the performance of seventy-five percent of the top-50 cryptocurrencies is superior to that of Bitcoin, an altcoin season begins. When the opposite of the same occurs, the Bitcoin era is revealed.

How long for an ‘Alt Season’?

The market was halfway done by the end of April, as seen by the alt season index. Only a trigger was required to begin the altseason. However, the collapse of the Terra ecosystem set off a market-wide collapse that caused the value of all cryptocurrencies to fall below the $1 trillion thresholds. The cryptocurrency season was consequently delayed even further as a result of this.

Image source: Blockchaincenter.net

Soon after, Bitcoin’s market share increased to a 10-month high of 48%. In fact, some are already predicting a season for bitcoin. Thanks to a steady rebound over the previous three months, the market had risen above the seasonal peak at the time of writing. Investors are now encouraged by this and anticipate an upcoming cryptocurrency season.

Sadly, if historical transitions are taken into account, the same can take anywhere from two to five months.

The alt season may not arrive until the end of this year. The reason for this is that the correlation between Bitcoin and stock indices has reached 0.63 for the S&P 500 and 0.59 for the DOW.

Since all indicators are now merely flashing a sell signal, this is not a sure-shot buy signal just yet. For instance, according to the Bitcoin Rainbow Chart, the optimum time to buy Bitcoin is when its price is getting closer to $27,000. Additional increases in the same would encourage more accumulation.

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Elena R

Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.

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