Bitcoin Dominance Season in the Cryptocurrency Market as Altcoin Index Reaches 24

Hello crypto enthusiasts! Have you ever wondered if it's time for Bitcoin to shine or if smaller altcoins will make big moves? There's an amazing tool that helps us know: Altcoin Season Index. As of May 6th, at 00:38 UTC, this index, tracked by CoinMarketCap (CMC), recorded a value of 24. This index is the same as the previous day and sends a clear signal: the crypto market is currently in a phase known as Bitcoin Season. Understanding the Altcoin Season Index So, what exactly is this index and why should you care? The Altcoin Season Index is a metric designed to provide investors with an overview of the performance of the crypto market as a whole compared to Bitcoin. It helps answer the question: on average, do altcoins outperform the current Bitcoin? Here is the general way of operation: This article will examine the performance of the top 100 cryptocurrencies by market capitalization on CoinMarketCap. More importantly, it excludes stablecoins and wrapped tokens, as their performance does not reflect speculative growth or market sentiment in the same way as other assets. The comparison is made over a specific period, typically the past 90 days. The index scores range from 1 to 100. The main thresholds are: Altcoin Season: Occurs when 75% or more of the top 100 coins ( excluding stablecoins/wrapped tokens ) have outperformed Bitcoin over the past 90 days. The index is usually high, often quoted as above 75 or 80. Bitcoin Season: Occurs when 25% or less of the top 100 coins ( excluding stablecoins/wrapped tokens ) have outperformed Bitcoin over the past 90 days. The index will be low, often below 25 or 20. Neither: If the market does not meet the criteria for Altcoin Season or Bitcoin Season, the market is considered to be in a transitional phase or "Neither." Currently in the Bitcoin season: What does Point 24 mean? Score 24, according to CoinMarketCap, is entirely within the definition of Bitcoin Season. This indicates that over the past 90 days, most of the top 100 altcoins have not kept up with the performance of Bitcoin. In fact, less than 25% of these altcoins have outperformed the king of cryptocurrency during this period. What does this mean for the current situation of the crypto market? Risk-averse Psychology: Bitcoin season usually occurs at a time when investors prefer the relative safety and liquidity of Bitcoin over smaller and more volatile cryptocurrencies. Bitcoin's dominance increases: As Bitcoin performs better, its share of the total crypto market capitalization (Sự Bitcoin) dominance tends to increase. This is the main feature of the Bitcoin Season.Altcoins fall in price compared to BTC: Even if the price of altcoins in USD terms is stable or rises slightly, they are still likely to depreciate when compared to Bitcoin.Focus on the leader: Capital seems to be flowing mainly into Bitcoin, due to the interest of institutions, Macro factors or its position is the main gateway to cryptocurrencies for new investors. This does not necessarily mean that altcoins are completely collapsing, but it means that if you have held a diverse portfolio of top altcoins and Bitcoin over the past three months, the amount of Bitcoin you hold is likely to have a better percentage growth. Navigating the crypto market cycle Understanding the concept of market seasons is crucial for anyone serious about investing in the crypto market. The market is not a static entity; it moves in cycles. These cycles are influenced by countless factors, including: Macroeconomic conditions (inflation, interest rates, global liquidity).News and developments regarding regulations.The technological advancements in the crypto space (protocol upgrades, new applications).Investor sentiment and the market (fear, greed, FOMO).Significant events like the Bitcoin halving cycle. The Bitcoin Season and Altcoin Season are phases within these larger cycles. Historically, a strong Bitcoin price surge often occurs before Altcoin Season. When the price of Bitcoin rises, it attracts new capital and confidence into the crypto market. As the Bitcoin price surge cools or stabilizes, some profits gained from Bitcoin may shift to altcoin, pushing their prices up - sometimes exponentially - leading to Altcoin Season. Understanding which season we might be in can help investors adjust their strategies. For example, holding a larger proportion of Bitcoin may be beneficial in Bitcoin Season, while increasing exposure to promising altcoins may be advantageous leading up to or during Altcoin Season. Analyze the performance of altcoin in different seasons In the Bitcoin Season, analyzing the performance of altcoins requires a different perspective. Just looking at the USD price can be misleading. It would be wiser to consider the performance of altcoins against Bitcoin (, for example: the ETH/BTC pair, the ADA/BTC pair, etc. ). If the USD price of an altcoin increases by 10% but the USD price of Bitcoin increases by 20%, then that altcoin is underperforming compared to Bitcoin. Key aspects to consider when analyzing altcoin, especially during Bitcoin Season: Relative strength: Which altcoin, if any, is showing relative strength compared to Bitcoin? These could be early indicators of where the capital flow may go next. Story: Are there specific sectors or stories within altcoins (, for example: AI tokens, DeFi, NFTs, specific Layer 1 ), that are independently attracting attention? Development activity: Strong project development and upcoming milestones can sometimes help an altcoin perform better even during Bitcoin dominance. Liquidity: Small-cap altcoins can be very volatile and illiquid, making them riskier during times when capital is consolidating in larger assets like Bitcoin. On the contrary, during the Altcoin Season, the focus shifts to identifying altcoins with strong fundamentals, clear use cases, dynamic development teams, and positive momentum that are ready for significant growth as capital flows out of Bitcoin. What is the dominance of Bitcoin and why is it important? Closely related to the Altcoin Season Index is Bitcoin Dominance. This index represents the market capitalization of Bitcoin as a percentage of the total crypto market capitalization. Although it is not an exact calculation like the Altcoin Season Index, both often move in parallel. When Bitcoin Dominance increases, it usually means that Bitcoin is gaining a larger market share of the new money flowing into the crypto market or that altcoins are losing value faster than Bitcoin. This aligns with the Bitcoin Season. When Bitcoin's dominance decreases, it often means that altcoins are growing faster than Bitcoin, typically signaling the start or continuation of Altcoin Season. Following the Bitcoin Dominance chart is another tool that investors use along with the Altcoin Season Index to assess the market environment. Currently, with the index at 24, we expect Bitcoin Dominance to be relatively high or on the rise.