Mar 1
What is AltSeason, Step by Step
Altseason, for our approach, is when altcoins are gaining in US Dollar Value faster than Bitcoin is. We created the best AltSeason Tracker and look forward to sharing it with you!
These are exciting periods in the cryptocurrency market where alternative coins (altcoins) experience a significant increase in price, trading volume, and market capitalization.
While altcoin season may occur when Bitcoin’s price is relatively stable or stagnant, we need a specific plan so we can identify in advance which altcoins are most likely to experience rapid price growth and attract a lot of attention from traders and investors.
Here are some general steps that confirm an altcoin season:
Bitcoin Dominance decreases:
- The first sign of an altseason is a decrease in Bitcoin dominance, which means that Bitcoin’s market capitalization as a percentage of the total cryptocurrency market cap is declining. While this indicates that investors have shifted their focus to other cryptocurrencies, it is an average of the entire group. Within that group of coins, some will be out performing, while others are stagnant. Unlike the Crypto SmartWatch, Bitcoin Dominance doesn’t give us the specific insight about which coins are performing best.
Altcoins show price growth:
As Bitcoin dominance decreases, this is a result of altcoins having already demonstrated significant price growth and now the average is coming along. New investors begin looking for other cryptocurrencies that they believe will continue higher.
Trading volume increases:
During an altcoin season, trading volume for altcoins increases significantly. This is because many traders and investors are buying and selling altcoins, hoping to capitalize on the market’s bullish trend.
Market capitalization increases:
- As more traders and investors buy altcoins, the market capitalization of the altcoins increases faster than the market cap of Bitcoin. Monitoring the trend of the market cap chart spreads can help pinpoint when the trend is losing momentum.
BEWARE The Altcoin hype phase:
- During the later part of the altcoin season, after significant price advances, there is often a lot of profit stories and hype surrounding the unending future prospects for specific altcoin projects.
- In the excitement, traders and investors may be entering with position sizes that are too large and sometimes with higher leverage than fits their equity… at the end of the bullish frenzy…
Before you trade, study the 12 Ways That People Lose Money Trading.
Altseason Rule Of Thumb
There are three states that the crypto smartwatch AltSeason Tracker portfolio can be in: Fiat, Bitcoin, or Altcoins.
Frequently Asked Questions:
Q: When does an altcoin season usually occur? A: Altcoin season usually occurs when Bitcoin’s price is relatively stable or stagnant, and investors begin to shift their focus and investments towards other cryptocurrencies.
Q: What are some examples of altcoins? A: Some examples of altcoins include Ethereum, Binance Coin, Cardano, Polkadot, Chainlink, and Dogecoin.
Q: How long does an altcoin season last? A: The length of an altcoin season can vary, but it typically lasts several weeks to several months.
Q: Is it safe to invest in altcoins during an altcoin season? A: Investing in altcoins during an altcoin season can be risky, as the market can be highly volatile. It’s essential to do your research and invest only what you can afford to lose.
Q: How do I know if an altseason is happening? A: You can monitor Bitcoin dominance, altcoin prices, trading volume, and market capitalization to get an idea of whether an altcoin season is happening. You can also follow the Crypto SmartWatch to stay informed with the Daily Action Matrix.
Technical Analysis Patterns To Watch For
There are several technical analysis patterns that our crypto trading course teaches use to identify a potential bottom formations in cryptocurrency markets. Learn more about our Tradingview AltSeason Indicator.
Here are three common patterns that make up the core of the Crypto SmartWatch trend following approach.
- 1–2–3 Bottom: This bottom formation pattern has been well know for more than 100 years. It is a bullish reversal pattern that occurs when a crypto forms two higher lows at around the same historical price level. The two lows are separated by a period of price consolidation, which forms a “W shape” or a “1–2–3 pattern.” When the price breaks above the #2 point, it can be a sign that the trend is changing direction, and the market is reversing.
- Bullish divergence: Bullish divergence is a technical analysis signal that occurs when the price of a crypto is making lower lows, while the tradingview indicator, such as the Relative Strength Index (RSI) or the MACD, is making higher lows. This can indicate that the trend is losing momentum and that a reversal may be imminent.
- The Ichimoku Cloud is a technical analysis tool used to identify trend changes can be particularly useful for confirming key levels of support and resistance as the 1–2–3 formation is breached.
- Bollinger Bands include a vital filter to identify false trend changes that often occur when the price breaks out from the 1–2–3 pattern. Should the bullish price breakout temporarily move outside of the Bollinger Bands but then quickly returns to within the bands… this can flag a fake-out break-out. Our crypto trading risk control rules are ready just incase price may continue in its original trend direction.
Look inside bitcoin dominance
The Crypto SmartWatch is a way to look inside bitcoin dominance to see which are the front running coins that are pushing the change in bitcoin dominance.
In other words, while the crypto markets tend to move together in a wave — the individual coins within that wave can be separated into the best performing coins and the flatliners that are dragging down the average.
