Altcoin Waves: Modeling and Predicting Price Trends in the Next Altcoin Wave
Introduction
The altcoin season represents a distinct phase in the cryptocurrency market, offering seasoned traders the opportunity for significant returns. Typically transitioning from the Bitcoin Season, this market cycle [1] is known for its potential lucrative outcomes. Nevertheless, novice traders often grapple with the complexities of discerning optimal entry and exit points for altcoins.
In response to this challenge, a predictive model named Altcoin Waves [2] has been developed, employing a linear combination approach to forecast trends within the altcoin market from 2024 to 2025. The model specifically centers around the market capitalization of the three most influential altcoins (Ethereum, Binance coin, and Ripple), utilizing advanced data treatments facilitated by the R statistics platform. This initiative is designed to empower traders with a more insightful perspective, facilitating strategic decision-making throughout the upcoming altcoin season.
Altcoin Waves data treatment
Alternative coins, often referred to as “altcoins,” represent a relatively nascent category of digital currencies. Two distinct altcoin waves have transpired, and the anticipation for the forthcoming wave is palpable, characterized by an expected surge in market activity. While predicting the future remains inherently challenging, models can serve as valuable benchmarks to navigate prospective market movements. As we delve into the intricate landscape of cryptocurrency dynamics, the upcoming altcoin wave holds the promise of being particularly impactful, laying the groundwork for innovative and dynamic developments in the digital asset sphere.
Price data were sourced from Coingecko [3], spanning the period from 2016 to 2023. Analyzing the initial wave, the peak day for altcoin market capitalization was observed at 546 ± 12 days post the Bitcoin halving event on July 9, 2016. Subsequently, during the second altcoin wave (2020–2024), a similar pattern emerged with the peak occurring 547 ± 13 days following the Bitcoin halving event on May 11, 2020.
Data import, pre-processing, and multivariate procedures were executed using the R software [4], incorporating Signal Processing (signal) [5]. The entirety of data processing activities was undertaken utilizing the open-source R software provided by the R Foundation for Statistical Computing. Embrace the power of R in your analytical endeavors!
Altcoin Waves model
The Altcoin Waves model has afforded an avenue for delving into the altcoin market. A notable aspect of this exploration lies in the common behavior where individuals invest in altcoins with the anticipation of substantial gains, often referred to colloquially as “waiting for the moon.” Contrary to this popular sentiment, market dynamics unfold in discernible waves. Drawing inspiration from the Bitcoin Waves hypothesis, which posits the predictability of subsequent waves through the approximation of future waves as linear combinations of their predecessors, the Altcoin Waves model was crafted. This framework seeks to enhance our understanding of the nuanced patterns inherent in the altcoin market, offering information into the cyclical nature of its movements.
The 2016–2020 wave is depicted in Figure 1, illustrating the market capitalization of leading altcoins. It is discernible from the figure that Ethereum and Ripple shared the market spotlight during this period.
Figure 2 illustrates the altcoin wave from 2020 to 2023. This wave was prominently characterized by the dominance of Ethereum, which emerged as one of the leading altcoins showcasing significant programming innovations within the community.
Finally, the Altcoin Waves model has forecasted the altcoin market for the upcoming altseason, revealing a pronounced surge expected in 2025, as depicted in Figure 3.
It is important to note that not all altcoins will yield similar outcomes. The Altcoin Waves model predicts the following results:
These projections underscore the varying potential trajectories for different altcoins as envisaged by the Altcoin Waves model.
Conclusion
The presented model, although delicate, offers a depiction of the impending altcoin season for Ethereum, Binance Coin, Ripple, and Polkadot. Delving into this subject matter enables both novices and seasoned professionals to acquire a broad understanding of the altcoin market.
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Acknowledgments
The author is grateful to Satoshi Nakamoto, Hal Finney, Nick Szabo, Changpeng Zhao, Sabrina Moraes, Fernando Ulrich, André Fauth, Criptomaníacos, and Vela Trader.
References
1. Altcoin Season — Exploring Alt Seasons and Crypto Market Cycles (ivanontech.com)
3. Cryptocurrency Prices, Charts, and Crypto Market Cap | CoinGecko
http://127.0.0.1:26406/library/signal/html/signal.package.html
