The phenomena of "altcoin seasons" manifests the majority share of the Bitcoin traded against a reduced supply of all other cryptocurrencies. This moment, naturally, consists of an interplay of several market aspects, historical regularities and “redirection” signs of capita to altcoins.
It is common for the trend of altcoin seasons to take place after huge increases in Bitcoin’s price. Once Bitcoin attains new records, traders tend to move part of the money to buying cheaper altcoins which have better chances of a shorter and more massive run. Such patterns were observed in the altcoin runs of 2017 and early 2021, both of which occurred at some point after strong Bitcoin appreciation rates.
Among the critical indications that help to predict an upcoming alt season are rising market volumes and favorable views within altcoin communities. Many times, a flood of activity and excitement from new promising projects, especially from the Defi and NFTs spaces, is a refreshing change and this shifts all attention to these altcoins. By following these indicators - Dominate in percentage continues to decline, across the volume variations, and trend of the projects that are coming up - traders can see and know if an altcoin season might be in the offing and up to what percentage they can adapt their strategies.
The first feature shall be the decline of Bitcoin’s total share of the crypto market index which is known as its dominance. A declining dominance often means that people are less interested in owning Bitcoin than some other cryptocurrencies while still appreciating a corresponding rise in potential returns, especially since Bitcoin’s growth rate is beginning to level off. At such points, rises in the value of the altcoin offer more chances to make a profit as the investors diversify and start putting their assets in that make sense from a speculative trading standpoint.
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