Altcoin Seasons happen when altcoins start to outperform Bitcoin.
The Altcoin Season Index measures the behaviour of the top 50 altcoins against Bitcoin within a 90-day period.
A reading above 75 indicates a strong altcoin season, while a reading below 25 suggests a Bitcoin season.
The Altcoin Season Indicator is a more visual tool that uses price movements, trading volumes, and market sentiment to assess the strength of the altcoin market relative to Bitcoin.
Both tools help investors identify market trends and make informed decisions.
One of the biggest buzzwords in crypto, particularly in bull markets, is "Altcoin Season."
This word gets thrown around quite a lot, particularly on social media. And while its name is pretty self-explanatory, not everyone knows exactly what it is.
So what does “Altcoin Season” mean? How can investors identify it? How can anyone know for sure that we are indeed in an Altcoin Season at any time?
This is where the Altcoin Season Index and the Altcoin Season Indicator come into play.
These tools help experts identify market trends and tell investors whether to double down on Bitcoin or liquidate a portion of their holdings and apply pressure on the altcoins.
Before going for the tools, it is important to understand what the word Altcoin Season" means.
“Altcoins” refer to any cryptocurrency other than Bitcoin.
It follows that the word “Altcoin season”, or "Alt Season," refers to a period when this set of cryptocurrencies start to outperform Bitcoin.
When this happens, Bitcoin grinds upwards like the rest of the market, but slowly.
The "altcoins," on the other hand, are charged with rocket fuel in comparison and can rake in double-digit gains in mere days or weeks.
During this time, investors typically liquidate a portion of their Bitcoin holdings and jump on the altcoin train to make a profit and reenter the market when the altcoins start to cool off.
The Altcoin Season Index works much the same as any other chart. It helps to identify and track things.
"Things", in this case, is the Altcoin Season.
This Index compares the performance of the top 50 altcoins to Bitcoin over a specified timeframe (typically 90 days).
If the majority of these altcoins are outperforming Bitcoin, we say that the market is in an altcoin season.
The altcoin season index
The chart above shows the altcoin season index.
The scale is graded on either side at the 75% mark and at the 25% mark, much the same way as an RSI indicator on any technical chart.
If the Index is above 75, the market is in a strong altcoin season, and 75% or more of the top 50 alts are beating Bitcoin over the last 90 days.
When the Index sits between 25 and 75, the market is mixed, and neither Bitcoin nor the Altcoins are winning—not particularly, anyway.
Finally, an index below 25 shows that Bitcoin is beating most altcoins, which indicates a Bitcoin season.
The Altcoin Season Indicator is another tool that analysts use to pinpoint market trends.
While this indicator is similar to the regular Altcoin index, it is more visual and dynamic, using charts and graphs to display the performance of Altcoins relative to Bitcoin.
The Altcoin Season indicator collects data from several sources, including price movements, trading volumes, and market sentiment, and provides users with a clear view of the market's activity.
This indicator often includes performance charts, which show the performance of the top Altcoins compared to Bitcoin; heatmaps, which show which part of the market has more strength; and trendlines, which indicate the market's general direction.
The Bitcoin rainbow chart
Other parts of the indicator can include rainbow charts, sentiment indicators, ROI comparisons and much more.
The rainbow chart, as shown above, basically indicates what mindset to have during market epochs, with "buy!" and "sell!" signals clearly indicated.
In sum, the Altcoin Season Indicator is mostly interpreted the same way as the Altcoin Season Index but might be more detailed and complex.
Overall, understanding the right tools to use at the right time can be one of the key drivers of informed decision-making and proper risk management.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.