Here’s When The Altcoin Season Happens Following The Bitcoin Cycle

[Ben Graham]

Bitcoin’s recent movement has left many traders waiting for signs of an altcoin season, and a post shared by crypto analyst Crypto Nova offers a different way to understand when this will actually begin. 

The explanation, supported by charts from 2017 and 2021, shows that altcoins have historically performed their best while Bitcoin’s price action was already climbing, not after it had reached its peak. The charts she shared show how those earlier cycles unfolded and why the timing of Bitcoin’s surge has been the important factor each time.

Altseasons Form During Bitcoin’s Strongest Surges

This outlook goes against the projection of many crypto analysts, who have been waiting for a downturn in the Bitcoin dominance characterized by outflows from Bitcoin and into the altcoin market.  

However, careful technical analysis shows that the largest and most explosive altcoin seasons did not occur after Bitcoin had completed its run. Instead, they developed while Bitcoin was already pushing to new price highs. 

The 2017 cycle illustrated this the most clearly. Bitcoin dominance began to decline during an altcoin season, even as BTC surged from around $1,000 to nearly $20,000. The chart shows a waterfall-like collapse in dominance from 95% in early 2017 to below 40% in early 2018, happening at the exact moment when Bitcoin was rising massively. Altcoins were already outperforming the leading cryptocurrency long before Bitcoin topped just below $20,000.

A similar pattern played out in 2021. Bitcoin dominance peaked in January of that year and started falling while the Bitcoin price climbed from roughly $30,000 to its mid-cycle high above $60,000. Although altcoins took a little longer to increase compared to 2017, the bulk of their performance still arrived during Bitcoin’s rapid upward trajectory, not after it had stalled or reversed. 

The charts below highlight this synchronicity clearly: dominance moves lower while Bitcoin candles continue to stretch higher.

Bitcoin Needs A Confirmed Bottom And A New Surge

Nova noted that traders are making a mistake by focusing solely on Bitcoin dominance without considering Bitcoin’s broader market structure. It is important to note that dominance does not drop simply because Bitcoin moves sideways or reaches a peak. 

Instead, dominance mostly declines when Bitcoin is in a strong, sustained uptrend, but the altcoin niche is witnessing more inflows compared to the leading cryptocurrency. This means an altcoin season is unlikely to start until Bitcoin prints a confirmed bottom and its rally convinces inflows into altcoins. 

As noted by the analyst, Bitcoin is currently in a downtrend, and without a shift in trend, dominance metrics alone cannot trigger altcoin momentum. This viewpoint challenges the frequent claims circulating online that altseason is here or just about to begin.

As it stands, the crypto industry is still logged into a Bitcoin season, with the CMC altcoin season index sitting at 19 and the CMC Bitcoin dominance at 58.7%.