The altcoin market had a disastrous 2022 and a neutral but hopeful first half of 2023. Long-term indicators of altcoins’ strength versus bitcoin are at all-time lows today.
According to long-term data from the Altcoin Season Index, the altcoin market has fallen to levels last seen in 2019 and 2020. This information alone does not make altcoin holders optimistic. However, historical data shows that these lows preceded the TOTAL2 chart’s exponential bull market that began in late 2020.
Altcoin market hits 2019-2020 lows
BlockchainCenter potential altcoin season data expresses the relationship between Bitcoin (BTC) price growth relative to TOP 50 altcoin price growth. When BTC price rises more (or falls less) than top altcoin prices, it indicates an ongoing Bitcoin season (readings below 25). On the other hand, if the BTC price falls more (or rises less) than the altcoins, it is a sign that the altcoin market is dominating (levels above 75).
Naturally, the chart stays in the neutral range between 25 and 75 most of the time. This indicates that neither the bitcoin market nor the altcoin market is currently dominating the cryptocurrency sector.
Additionally, the altcoin seasonal index contains three timeframes: monthly, quarterly (seasonal), and yearly. And in the latter, long-term area, today we can see a clear bitcoin season and the fall of the altcoin market to historic lows (blue areas).
Altcoin Market vs. Bitcoin Market / Source: Blockchaincenter.net
We see above that the altcoin market fell to historic lows in January 2019. However, it recovered soon after, but crashed again and began long-term accumulation. It lasted from May 2019 to June 2020.
Extrapolating this 13-month period to today’s market conditions, expect the altcoin market to remain at these lows through September 2024. Should this happen, the altcoin bull market would begin around six months after Bitcoin’s halving. Which is forecast for April 17, 2024 according to the latest data from BuyBitcoinWorldwide.
It is worth noting that only 5 altcoins from the TOP 50 market cap rankings have posted higher returns than BTC over the last year. These are INJ (242%), XDC (68%), XRP (56%), BCH (50%) and LTC (25%) respectively. Bitcoin, meanwhile, is up 14.3%, outperforming all other 44 altcoins.
TOTAL2 in long-term accumulation
The above predictions are consistent with the events of the previous cryptocurrency market cycle. If we look at the long-term chart of the altcoin market’s total capitalization (TOTAL2), we see fractal similarities between cycles.
In 2017, the altcoin market experienced an exponential bull market that took TOTAL2 to a high of $474.50 billion in January 2018. The market then declined sharply for 12 months until it bottomed at $36.75 billion in December 2018.
The macro bottom marked the end of the bear market and ushered in long-term accumulation. The main phase was between May 2019 and June 2020 (green area). According to the Altcoin Season Index, this period corresponds to where the altcoin market has been at all-time lows versus Bitcoin.
Immediately thereafter, the mature phase of the bull market began. TOTAL2 continued to grow exponentially, hitting an all-time high (ATH) of $1.71 trillion in November 2021.
Later, the story rhymed again and the altcoin market lost about 75% of its value. In June 2022, it fell to a low of $427.57 billion. 6 months later, TOTAL2 again approached that bottom (blue circle) and formed a bullish double bottom pattern.
The rebound and bounce we’ve been witnessing since early 2023 ushered in the accumulation phase, or early stage of the bull market. However, just this month, the altcoin market fell to historic lows against BTC. Should the accumulation phase continue for another 13 months, the start of the bull market’s maturity phase is predictable around September 2024.
This means that altcoin holders still have a long way to go to achieve gains comparable to previous cycles. On the other hand, however, it offers more opportunities to build a long-term portfolio that can generate impressive returns in the next bull market.
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Disclaimer
In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, however, market conditions are subject to change without notice. Always do your own research and consult a professional before making any financial decisions.
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