Bitcoin's share of the crypto market continues to decline, while the altcoin market is experiencing realboom.But does this mean that the so-called altcoin season has arrived - a period when many cryptocurrencies are ahead of Bitcoin in price and growth rate. We tell you why altcoins are winning back positions and how to protect your funds from losses at this time.
In April, Bitcoin dominated for the first time in recent years.two years later it dropped to 52.8%. This happened against the backdrop of a growth in cryptocurrency market capitalization above $2.2 trillion, largely caused by a sharp rise in altcoin prices. However, now the share of the main digital coin in the industry still remains high. For example, during the 2017 rally, Bitcoin dominance fell to 34%.
What is the Altcoin Season Index?
Domination index (dominance)— this is the share of Bitcoin capitalization in the marketcryptocurrency. To calculate it, it is enough to divide the capitalization of the main cryptocurrency by the total market capitalization and multiply by 100. However, there is an easier way - the share of Bitcoin in the industry can be viewed on data aggregator sites such as CoinMarketCap and CoinGecko.
You can also use the Altcoin indexSeason Index, which tracks quotes of the top 50 cryptocurrencies by capitalization. If 75% of them generate higher returns than Bitcoin for three months in a row, then the altcoin season index goes up. And now he is at 92 out of 100 points.
The low share of bitcoin in the market suggests that investors are willing to take risks, as they transfer part of the funds from the market benchmark, bitcoin, to riskier altcoins.
This often happens in a rising market when investors are trying to find more profitable assets than the first cryptocurrency. At the same time, during a decrease, the reverse process occurs, sincealtcoins almost always lose significantly more on cryptocurrency market drawdowns than BTC.
Altcoins that went off in 2021
In recent months, hundreds and thousands of percent of growthshow the largest projects, market leaders. So, for example, the Binance Coin, the capitalization of which ranks third after bitcoin and ether, has risen in price almost 17 times this year, and on April 12, it even reached a record high of $ 638.
Immediately behind BNB is the XRP cryptocurrency,which in December last year, against the backdrop of Ripple’s legal proceedings with the US Securities and Exchange Commission (SEC), fell to a local low of $0.17. Since then, the coin’s quotes have risen almost 10 times - to $1.69. At the same time, the cryptocurrency remains far from its historical maximum of $3.7, set in January 2018.
Another striking example is the utility token of the IndianWazirX trading platform. It showed a growth of 1,400% just from the beginning of March, and its capitalization exceeded $1 billion. With such a seemingly colossal market valuation for cryptocurrencies, the asset ranks only 92nd in this indicator.
At the same time, BitTorrent's BTT token showedgrowth of 2,000% over several weeks, and on April 5, it renewed its all-time high at around $ 0.013. Altcoins THETA and Filecoin also showed impressive dynamics, each of which has grown in price by 570% since the beginning of the year.
Why did altcoins start to actively rise in price?
The situation in which altcoins are ahead of Bitcoinin terms of profitability on the crypto market, it is called altcoin season. In 2017, while the first cryptocurrency showed a profitability of 2,000% for the year, assets like XRP rose in price by 56,500%. According to analyst SecretsOfCrypto's description of market cycles, funds begin to flow into altcoins when Bitcoin stops its active growth and goes through a consolidation phase.
This is exactly what happened in the last month.For a long time, Bitcoin could not overcome the $60,000 mark and update the March maximum of $61,800, trading in a narrow price range; many altcoins showed a strong growth in quotes and won back part of their market share.
However, now that the rate of the first cryptocurrencysharply exceeded $60,000 (and on April 14 it even got close to $65,000, updating its historical maximum), most of the largest altcoins by capitalization show less growth per day than Bitcoin or do not exceed it much.
The exception is XRP, which over the lastweek increased almost 90% in price. Previously, this altcoin remained undervalued amid legal proceedings by the SEC and Ripple. However, now that more and more positive factors are appearing in the case that indicate a possible victory for the blockchain startup from San Francisco, the price of the XRP coin is actively growing.
How to make money safely during altcoin season?
The market has reached a stage where any altcoinregardless of fundamental factors, it can demonstrate explosive growth in quotes. This is due to the fact that investors are looking for new opportunities to make money and are buying up assets with low capitalization. As a result, this has a positive impact on the value of such assets.
The SecretsOfCrypto analyst advised to have clearexpectations and time horizons when investing in certain altcoin market assets. They may not have much prospects in the long term, but attentive investors can profit from their growth in the short term.
to reduce the risks of working with cryptocurrencies duringIt's altcoin season, it's important to accept that this space is still an unregulated Wild West. Many will want to make money on the new wave of hype not in the most honest way. Moreover, it is important to understand that most altcoins will disappear over time. Yes, they may experience periods of growth, but a subsequent decline can cause serious losses if risk management is not followed:
- You can invest in little-known altcoins only with money that you are not afraid of losing.
- You should not consider the purchase of such assets as the main way of earning money.
- Cryptocurrencies are extremely volatile. And the cost of altcoins with low capitalization can fall by tens of percent in a day.
Also, before you buy an altcoin of this or thatanother little-known project, it’s worth studying its website, documentation, information about team members and looking for reviews from other users. A positive sign is if there is a team behind the project that is not hiding behind pseudonyms and is ready to communicate. Equally important is the community that supports the chosen cryptocurrency.
Altcoins that have just appeared and are starting todevelop, are most often not available for trading on the largest crypto exchanges such as Binance, Coinbase or Kraken. It is necessary to find out which crypto exchanges offer assets and whether these trading platforms are trustworthy.
The final and main rule is that it is better to missprofit than to incur losses. You shouldn’t give in to FOMO (fear of missing out) and try to make money on absolutely all altcoins that are starting to show growth.
And most importantly, don't think that this is the last chance to make money Markets are cyclical, you just need to be able to wait patiently.
Where is it more profitable to buy cryptocurrency? TOP-5 exchanges
For a safe and convenient purchase of cryptocurrencies with a minimum commission, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support deposits and withdrawals of funds inrubles, hryvnias, dollars and euros.
The reliability of the site is primarily determinedtrading volume and number of users. By all key metrics, the largest cryptocurrency exchange in the world is Binance. Binance is also the most popular crypto exchange in Russia and the CIS, since it has the largest cash turnover and supports transfers in rubles from bank cardsVisa / MasterCardand payment systemsQIWI, Advcash, Payeer.
Especially for beginners, we have prepared a detailed guide: How to buy bitcoin on a crypto exchange for rubles?
Rating of cryptocurrency exchanges:
| # | Exchange: | Website: | Rating: |
|---|---|---|---|
| 1 | Binance (Editor's Choice) | https://binance.com | 9.7 |
| 2 | Bybit | https://bybit.com | 7.5 |
| 3 | OKEx | https://okex.com | 7.1 |
| 4 | Exmo | https://exmo.me | 6.9 |
| 5 | Huobi | https://huobi.com | 6.5 |
The criteria by which the rating is set in our rating of crypto-exchanges:
- Work reliability— stability of access to all functions of the platform, including uninterrupted trading, deposits and withdrawals of funds, as well as the duration of the market and daily trading volume.
- Commissions– the amount of commission for trading operations within the platform and withdrawal of assets.
- Feedback and support– we analyze user reviews and the quality of technical support.
- Convenience of the interface– we evaluate the functionality and intuitiveness of the interface, possible errors and failures when working with the exchange.
- Platform Features– availability of additional features — futures, options, staking, etc.
- final grade– the average number of points for all indicators determines the place in the ranking.
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