The altcoin season, a name which represents a period where the prices of cryptocurrencies, besides Bitcoin, rise rapidly, has become synonymous with the crypto market. Despite predictions that the altcoin season was coming, it is yet to begin even after the Bitcoin price hit a new all-time high. However, this incredibly bullish period may not be too far off as one of the most popular analysts in crypto, Capo of Crypto, points out an interesting correlation between the current cycle and the 2020 cycle.
Capo Of Crypto Finds Similarities Between 2020 And 2024
Crypto analyst Capo of Crypto took to X (formerly Twitter) to announce that an altcoin season might be close due to current market trends resembling those from 2020 before the altcoin season began in the last bull run cycle.
The crypto analyst quoted his analysis from 2020, where he explained why he believed that the altcoin season was coming. In that 2020 thread, Capo points to a number of factors, such as Bitcoin’s dominance reaching resistance, Bitcoin price reaching a bottom, and general sentiment being bullish, meaning a higher risk appetite among crypto investors.
At the time, the Bitcoin price had bottomed in December 2020, before the altcoin rally began. If this is the case, then it means the analyst believes that the Bitcoin decline is over. Also, at this point, investors could be getting ready to rotate profits from BTC into altcoins, speaking the start of another altcoin season.
Moving on, the analyst also points out that the Bitcoin dominance of the market was nearing resistance. In 2020, this level was around 72-75%. However, this time around, it seems the resistance level lies around 55-60% dominance for Bitcoin.
At the time, Capo pointed out that the Bitcoin dominance breaking down and the “OTHERS” dominance doubling from its position at the time would mark the start of the altcoin season. At the time of writing, the OTHERS dominance is sitting at 9.97%, according to data from TradingView. But if Capo’s 2020 analysis were to be applied here, the dominance would have to rise to around 20% to kickstart the altcoin season.
What To Do In An Altcoin Season
Altcoin seasons are important to the crypto market given that it gives the opportunity for smaller altcoins to rally and make gains for their investors. However, during this time, a lot of pump and dumps happen, which would lose investors money if they are not careful.
Like Capo pointed out in the 2020 X thread, while a lot of altcoins will see massive rallies, “What is shit remains shit.” As a result, the crypto analyst cautions investors that: “This time you will have to choose wisely. Not all the altcoins will have crazy returns.”
Featured image created with Dall.E, chart from Tradingview.com
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