History Repeats? How Bitcoin Halving Could Fuel the Next Altcoin Season

Published by

Qadir AK

July 12, 2024

Brutal price drops have left many altcoins reeling. In the downtrend, many altcoins suffered a bloodbath and dropped almost 30% to 70% in price in recent months. This huge decline has many analysts doubting the altcoin season. However, recent developments in Bitcoin’s dominance provide a glimmer of hope for altcoins.

Want to know when to dive into altcoin season? Step in.

Timing the Altcoin Season: Insights from Wise Advice

Prominent crypto analyst Wise Advice offers a compelling analysis, suggesting that Bitcoin’s halving cycle could predict the next altcoin season. The core concept is that after each Bitcoin halving, which occurs roughly every four years, there is a significant opportunity for altcoins to surge. This pattern has been consistent throughout Bitcoin’s history.

The Bitcoin Halving Cycle

Analysts suggest that this could be an opportune moment for investors to shift their focus towards altcoins, anticipating potential gains. For a true altcoin season, at least 75% of the top 50 altcoins must outperform Bitcoin.

Typically, it takes about 1 to 1.5 years after each halving for Bitcoin to reach a new all-time high (ATH), creating a period of substantial growth for altcoins like Ethereum, Solana, and Polkadot. For instance, following the third Bitcoin halving on November 9, 2021, Bitcoin hit its ATH, and soon after, Ethereum peaked at $4,800 on November 10, 2021. Solana reached $250 just five days prior, Polkadot hit $55 on November 4, 2021, and Avalanche soared to $146 on November 21, 2021.

Similarly, during the second halving bull cycle in December 2017, Ethereum surged to $1,400 by early January 2018. The first halving bull cycle in November 2013 saw Litecoin jump from $2 to $53.

Understanding Market Movements: The Money Flow Pattern

Wise Advice explains that understanding these movements requires recognizing the pattern of money flow. Initially, investors flock to Bitcoin, and as Bitcoin’s price increases, profits are often reinvested into altcoins. This influx of money into smaller altcoins with lower market caps results in significant price increases for these assets.

Historical data shows that after Bitcoin reaches an ATH, its market dominance typically declines. For example, after the third halving, Bitcoin’s dominance fell to around 40%, and after the second halving, it dropped to about 35%.

Current Market Indicators: Bearish or Bullish?

Bitcoin’s dominance currently stands at 54%, still indicating a Bitcoin season. However, there has been a slight decrease this week from 55.04% to 54.68%. This small drop suggests that some altcoins have started to outperform Bitcoin. Wise Advice believes we are at the beginning of a cycle that will eventually lead to a new altcoin season.

Based on historical data and market trends, we can anticipate a period of significant gains for altcoins following the next Bitcoin ATH.

Are you ready to jump into the next altcoin boom? Why or why not?

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.