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Has Alt Season Already Ended?
The cryptocurrency market remains in an indeterminate phase of transition. After hitting a record of $2.6 trillion on May 12, the market’s entire cap has since deflated to $1.4 trillion, a fall of some 44%. Not only has this put the stoppers on bitcoin’s occupancy of the $50,000+ range, but it has also depressed the price of pretty much every altcoin in the market.
In fact, bitcoin’s share of the cryptocurrency market’s overall cap has risen since May 12, from a low of 39% (on May 19) to a fraction under 47% today, according to CoinMarketCap. And with certain major altcoins — Binance coin, XRP, polkadot and uniswap — having fallen by anything from 13% to 26% over the past week, it begs the question: has alt season ended before it had even properly begun?
Looking at the immediate situation, it’s hard to deny that alt season — in the sense of most altcoins rising more strongly than bitcoin — has indeed ended already. However, while bitcoin will likely grow in importance as investors seek a relative safe haven during a bearish market, we could very well see a new alt season resume once the market recovers, given that some of the major altcoins arguably have better near-term prospects than bitcoin.
Data Shows that Alt Season Has Ended
Price and market data clearly indicates that alt season is well and truly over.
For one, if you simply look at the performance of the big altcoins over recent timeframes, you’ll see that they’ve fallen more severely than bitcoin.
- Bitcoin: up by 4.8% (24 hours), down by 2.5% (seven days), down by 10.9% (days), and down by 2.3% (30 days).
- Ethereum: up by 10% (24 hours), down by 8.4% (seven days), down by 18% (14 days), and down by 15.3% (30 days).
- Binance Coin: up by 4.2% (24 hours), down by 13.7% (seven days), down by 20% (14 days), and down by 11% (30 days).
- Cardano: up by 5% (24 hours), down by 6.4% (seven days), down by 14.3% (14 days), and down by 11.4% (30 days).
- Dogecoin: up by 5.1% (24 hours), down by 8.6% (seven days), down by 20.6% (14 days), and down by 17% (30 days).
- XRP: up by 4.4% (24 hours), down by 17% (seven days), down by down by 27% (14 days), and down by 28% (30 days).
- Polkadot: up by 5.2% (24 hours), down by 25.7% (seven days), down by 30% (14 days), and down by 28% (30 days).
- Uniswap: up by 7% (24 hours), down by 15.2% (seven days), down by 24.5% (14 days), and down by 31.9% (30 days).
As the above list makes clear, bitcoin has retained more of its value over the past month, while every major altcoin has fallen heavily. Uniswap is down by just over 30% in the last 30 days, while polkadot and XRP are very close. By contrast, bitcoin is down by only 2.3% in the past month.
Price comparison chart covering BTC and ETH, BNB, ADA, DOGE, XRP, DOT and UNI prices over the past 30 days. Source: TradingView
At the same time, data from skew reveals that ethereum (the biggest altcoin by market cap and price) is falling behind relative to bitcoin.
Source: Twitter
Ethereum’s market cap had climbed to just over 50% of bitcoin’s on May 12, yet the selloff ensuing from Tesla’s rejection of bitcoin for payments caused investors to either exit the market completely or run back to BTC.
This is supported by sentiment data from Santiment, which recently tweeted that investor confidence surrounding ethereum has fallen to levels not witnessed since June 2018.
Source: Santiment/Twitter
If there were any remaining doubt that altcoins aren’t widely outstripping bitcoin right now, Blockchaincenter.net’s own dedicated altcoin season metrics do indeed show that it isn’t alt season.
Source: Blockchaincenter.net
What this chart reveals is that 75% of the Top 50 altcoins have not performed better than bitcoin over the last season, which the Germany-based Blockchaincenter.net defines as 90 days. In case you’re wondering, 75% of 50 is 37.5, so if 38 altcoins have performed better than bitcoin over the last 90 days, that means it’s alt season.
That said, 33 altcoins have performed better than bitcoin over the past ‘season,’ so we’re arguably not too far from still being in an alt season. Such coins include DOGE, ethereum classic (ETC), telcoin (TEL), and polygon (MATIC).
Performance of top 50 coins over the past 90 days. Source: Blockchaincenter.net
However, the previous chart shows that the dip from alt season is only just beginning, so we may expect fewer altcoins to outperform bitcoin over the coming weeks (and possibly months). Actually, Blockchaincenter.net’s data shows that it’s currently “Bitcoin Month,” meaning that bitcoin outperformed at least 75% of the top 50 coins in the past 30 days,
Performance of top 50 coins over the past 30 days. Source: Blockchaincenter.net
As you can see, bitcoin has coped with the bear market relatively well, while certain altcoins — such as internet computer, kusama, EOS, NEO, ethereum classic and polygon — have lost a big chunk of their former values.
What this all means is that, as the cryptocurrency market retreats from its former bullishness, fewer investors are willing to take a punt on newer — and relatively unproven — altcoins, choosing instead to play it safe (or safe-ish) with bitcoin.
Will Altcoin Season Return?
Of course, we see virtually the same pattern during every market cycle. Bitcoin reaches new highs, but at the same time becomes overbought and crowded, so traders begin flocking to altcoins, pushing them up to new heights and thereby initiating an alt season. But as the market loses confidence, altcoins fall massively while at least some investors return to bitcoin. And so on.
Source: Blockchaincenter.net
As the chart above illustrates, we tend to have alt seasons during market tops and bitcoin seasons during bottoms (and also in the initial stages of a bull market).
In other words, there’s every reason to expect the same thing to happen with the next bull market, whenever that may occur.
This seems all the likelier when it’s remembered that many of the big altcoins seem more promising on a developmental level than Bitcoin. The likes of Ethereum, Cardano, Solana and Polygon are all going through significant upgrades at the moment, increasing their respective capabilities and also raising the chances that their native tokens will be more sought after.
