Why Bitcoin’s next breakthrough may not be a seasonal signal for altcoins


On April 14, Bitcoin (Bitcoin) After a cumulative increase of 124.5 percent in 2021, it reached a record high of $64,900. However, there was a 27.5% correction in the next 11 days, marking a partial bottom of $47,000.

popular Crypto fear and greed index reached the lowest level In the 12-month period on April 25, this indicated that investors were closer to “extreme fear”, which is the exact opposite of the level of “extreme greed” that occurred when Bitcoin bounced above $60,000.

The fall from April 14th to 25th evaporated the market value of altcoins by US$200 billion. Nonetheless, the subsequent recovery can serve as an expected guide when Bitcoin finally manages to exit below the $40,000 level.

Bitcoin price in U.S. dollars, Coinbase. Source: TradingView

Altcoins also showed a similar trend, bottoming out to US$850 billion on April 22, but fully returning to a record of US$1.34 trillion on May 10. There is no guarantee that this pattern will repeat, but there is no better source of information than the recent market itself.

Altcoin market value, billion U.S. dollars. Source: TradingView

Cheaper is not always better

Many investors believe that when the price of Bitcoin rises, altcoins will always outperform the market, but is this the absolute truth?

Although this is the case in 2021, Bitcoin will be the clear winner in the last quarter of 2020 because it exceeds the market by 110%. However, analyzing the winners of the bull market in late April may provide interesting insights into the anticipation of the next rebound.

The performance of top altcoins from April 22 to May 9. Source: CoinCodex

Among the top 100 tokens, Ether Classic (and many more), polygon (Matic), wave, And Phantom (FTM) Is the clear winner. The winner is either an extended solution or a smart contract platform, and the industry leader Ether (Ethereum) Also outperformed the market.

80% of the worst-performing currencies are coins that are less than $1, which is the opposite of what investors usually expect. There is a persistent myth that cheap, nominal-priced altcoins will perform well during altcoin rises, but this is clearly not the case.

The top 100 altcoins performed the worst between April 22 and May 9. Source: CoinCodex

Timing of the market is impossible

Unfortunately, it is impossible to predict when the current correction will end, and altcoins have historically not generally performed well in bear market trends. This means that calling it an “alternative season” at the first sign of Bitcoin’s price recovery is an inaccurate strategy that can lead to financial collapse.

The general rule of thumb for the beginning of the “alternative season” is that cryptocurrencies (including Dogecoin) have hardly developed, with cumulative gains of 30% or more for two or three consecutive days.dog), Litecoin (LTC) And Ethereum Classic (ETC).

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