Cryptocurrency first appeared in 2009. The market has expanded rapidly since its creation, and there are now over 7000 cryptocurrencies. With major industry players as well as rivals, it has become a dynamic market. Furthermore, various words and trends have emerged in the market, such as ‘Altseason' and ‘Altcoins,' which cryptocurrency experts and traders have come out to clarify.
The first and most significant cryptocurrency was Bitcoin. However, several other cryptocurrencies, such as Monero, Ethereum, XRP, and Dash, have emerged as viable alternatives. Altcoins are a term used to describe these Bitcoin alternatives. Altseason refers to the time of year when alternative coins do better than Bitcoin.
What Causes an Altseason to Occur?
The cryptocurrency market share is split between bitcoin and altcoins, with bitcoin taking the majority of the market. The economy works on the demand and supply equation. An rise in bitcoin demand leads to an increase in BTC prices, which has the effect of lowering the price of altcoins. At this time, more people are buying bitcoin instead of altcoins or fiat currencies like the pound, euro, or dollar.
On the contrary, a drop in bitcoin demand results in a drop in price, which has the effect of increasing the prices of most altcoins. More people are interested in altcoins instead of BTC and fiat money at this time. The altseason is a time when the price of altcoins rises at the expense of bitcoin.
Following the rise of bitcoin and the crypto market's capitalization, a slew of new cryptocurrencies appeared as rivals to the BTC. The price of bitcoin was very high, and investors saw promise in some of the low-cost altcoins rising through the ranks of BTC.
As a result, BTC and altcoins have become major players in the cryptocurrency industry, with bitcoin dominating. As a result, any drop in bitcoin's market share leads to a rise in altcoin market share, resulting in an altseason.
Investors Benefits from Altseason
People grow a positive perception of altcoins as their prices rise during altseason. At the cost of BTC, investors boost their altcoin holdings, generating a market for more altcoins. Money invested in bitcoin flows through a variety of altcoins, causing a domino effect. The price rises for a brief period of time and then drops unexpectedly.
As a result, investors will profit from the altseason by investing wisely in altcoins at a time when their prices are rising. They must, however, be eager to resell the altcoins before the altseason ends in order to make a profit. In the crypto world, it's akin to Black Friday, and traders will make the most of their profits.
How to Tell the Difference Between an Altseason and a Bubble
When new entrants enter the market, a bubble develops, resulting in an unprecedented reduction in supply. To retain their earnings, current miners sell their cryptocurrency at higher rates. As a result of the operation, a slew of new investors flock to the cryptocurrency sector. Bubbles are difficult to detect since they only appear when they pop up. They will, however, burst as quickly as they popped, leaving investors with losses if they do not sell before the burst.
The supremacy of bitcoin, on the other hand, can be used to identify Altseason. When the percentage of capital market share and the price of BTC start to fall, it signals the start of altseason, as altcoins gain in value.
Altseasons in the Past has a long and illustrious history.
The most notable altseason occurred in December 2017, following the price of Bitcoin skyrocketing. The price of a bitcoin increased 19 times between January 2017 and the end of the year. In January, it was worth $1,000, but by the end of the year, it had risen to $19,000. Even though cryptocurrency had been around since 2009, many people learned about bitcoins for the first time throughout this bubble.
People started to see the low-cost altcoins as future cryptocurrencies with the potential to overtake bitcoin. BTC accounted for about 90% of the cryptocurrency market at the time, with other cryptocurrencies accounting for the remaining 10%. The demand for altcoins started to rise, and a flood of new investors flooded into the cryptocurrency capital market. By December 2017, the bitcoin bubble had exploded, and the altseason had begun, with bitcoin's capital market share beginning to fall.
In the following year, almost all altcoins saw a 400 percent increase in price, with some seeing a 400 percent increase. For example, in January 2017, Dash was worth $10, but in January 2018, it was worth $1439. However, altcoins have never seen such highs, and most of them have never seen such highs. Bitcoin, on the other hand, has regained its market share.
Thoughts
You can never be sure of making a profit in the cryptocurrency industry because it is so unpredictable. The pattern is characterised by long periods of lows and short periods of peaks. As a result, it is always a good idea to spend just what you can afford to lose. The altseason could arrive today or in the coming weeks. However, it is a safe idea to diversify your crypto portfolio with many altcoins in case this occurs.
Wish that wed go back in 2017