Cryptocurrency’s altcoin season began on 14 January at exactly 6am UTC
Here's why it looks like alt season, and what happened that day.
Have you heard? It's apparently altcoin season.
Altcoin season, or "alt season" for all the brevity fans out there, is a made-up term that means nothing and can therefore be defined however we choose. Because it means nothing and has no fixed definition, it obviously should not be taken as financial advice.
But when you look long enough at the Google Trends results for "altcoin", you can get a kind of sense of things picking up around 7 January.
Other metrics paint a more pronounced picture.
In this case, the metrics of Bitcoin price (red and green candles), Bitcoin dominance (gold line) and altcoin dominance (blue line) do. They show that altcoin season began on 13 January at precisely(ish) 8pm UTC.
The blue line is theoretically the total market cap minus the gold line, and the gold line is theoretically the total market cap minus the blue line, so you'd expect them to be a perfect mirror of each other. But between imperfect data, people coming in and out of fiat and the fact that sheer sentiment can move prices without any tangible difference in the underlying assets, it's not so tidy.
Let's walk through the chart.
1. 2 to 7 January: Run up
From 2-7 January, the Bitcoin and altcoin markets took a run together. The gold and the blue lines were rising in tandem, suggesting that fresh fiat and happy thoughts are entering the market. Bitcoin went from about $7,000 to around $8,300.
This trend diverged on 7 January when money shifted from altcoins to Bitcoin. This shift from altcoins to Bitcoin is shown by a simultaneously rising gold line and falling blue line.
2. 8 January: Pull back
The run ends. Both Bitcoin and altcoins pull back together and start dropping together.
3. 10 January: Money shifts disproportionately to altcoins
The pull-back doesn't last long. Bitcoin and altcoins markets both start to rise again. But something is different now. Bitcoin's price is still rising, but its dominance is falling.
It's candles up, blue line up, gold line down. This trend gradually flattens over the next few days, until...
4. 14 January, 6am UTC: Altcoin season begins
The same thing happens, but a lot more so.
Bitcoin's price keeps gently rolling upwards, but its dominance falls quickly as altcoin dominance rises equally fast. People out there are trading a lot of BTC for a lot of upwards blue line.
Stem to stern, we see Bitcoin dominance decline by an impressive 2.5% on that day alone.
Golly, what was that?
Here's a closer snapshot of the day, showing BSV flashing its green candle on the day, next to Bitcoin's declining dominance. The black lines crawling along the bottom are a smattering of the top market cap altcoins, just to show how comparatively inactive they were at the same time. And so began alt season.
Disclosure: The author holds BNB and BTC at the time of writing.