Altcoin Season Is Here! What Now?
Allllright bois. Let’s start off with some market recap here. $ETH cut through 2k like butter on 4/2/2021, and it’s holding up pretty nicely. BTC has been consolidating between 60k and 56k the last few days. Grayscale just added Chainlink to its large-cap digital asset fund, Cryptocurrency’s total market cap breached $2 trillion, and Shopify’s CEO went on Twitter to ask the firm’s potential DeFi role in the market. All tremendous news! I hope you’ve been enjoying those gains :) However, I want to talk about Altcoin Season. Let’s discuss!
A quick reminder that I’m a degenerate bum who started trading 5 months ago. This is by no means financial advice. glhf!
Altcoin Season
Yup…it’s here. If you’ve been holdings alts this whole time, your wallet may have gotten fatter the past couple of weeks. If not, it might happen in the coming days/weeks. Don’t believe me? Take a look at the charts below.
Fundamentally, the market is riding a strong wave of momentum right now. With the continual support of institutional money, big banks announcing new BTC targets, and herculean milestones such as Coinbase’s IPO, Uniswap’s V3 launch, and many more have made the cryptocurrency market extremely attractive. Overall things are looking amazing right now! Perhaps…too good…
2017’s Golden Run
Let’s revisit the altcoin season chart above, but with some relevant time stamps this time. Just to clarify, this chart is from April of 2017 to the present day. That’s 4 years of time. In the last 4 years, this is the first time ever since the 2017 bullrun that the Altcoin Season Index has placed above “90”.
Why is this relevant? Well…historically speaking, every cryptocurrency bullrun had ended with the reversal of Bitcoin dominance. Meaning…alt coins took over the market dominance…followed by the crash. Let me show you what happened at the beginning of 2018.
As you can see here…December of 2017 was the top. BTC topped out at nearly $20k, followed by a dramatic crash to around $3k at the absolute bottom. That is a scary 85% crash within one year of time. If you had invested all your money at the top of the market back then… that’s what I called a one-way ticket to divorce and a diet of 3 years of cup ramen. However, if we zoom out and look at the broader picture. From April 2017 to December 2017, BTC appreciated nearly 2000%. Assuming history repeats itself (it’s really not this easy…I’m just simplifying things here) and BTC continues to rise, we are nowhere near the top of the market in my humble opinion. You can argue that because we are touching the altcoin season index of “90” for the first time, we are actually at the level of April 2017. Does that mean BTC still has 20x to go in the coming months? I genuinely don’t think so, but at least it allows me to say that BTC breaking $100k is quite possible in the near future.
BBB (Beware, Be careful, Be patient)
Look…all I’m saying is we are in uncharted territory as BTC, ETH, and other coins out there breach ATH levels. We know how exciting it is for everyday people like us to taste 200%, 300%, or even 1000% gains in 2 to 3 months. I know these gains can be life-changing. It has definitely impacted my life tremendously. However, I want to remind everyone to take a step back and be careful. In 2017, we hit a road bump in March and September where BTC had closed ~8.5% below the previous months. I mean…we haven’t had a red month since October of 2020. That’s 6 straight months of GAINS!!! It is possible that within the month of April, BTC breaks through 62k, and we could see 70k soon. However, it won’t surprise me at all if BTC retraces to the 53k or even 48k level.
If you’re a HODLer…you should be fine here. I just think that there are potentially more profits to be made if we realize some gains this month, and patiently swing into some trades in the future.
Light at the End of the Tunnel
I am still extremely bullish on cryptos. I think it can change our lives even more in the coming months. I simply want to present the data that I see here and share it with you guys. Like I said in my previous post, the goal of this blog is for me to be as transparent as possible. Thus, what I’m aiming to do is to take profits when I see fit in the month of April (especially in alts), as I can turn them into ammunition if the market does retrace back to the 50k level. If the market continues its hot streak and it never retraces, I am perfectly fine with that as well. I am simply taking a calculated risk as well as trying to protect myself at the same time. Below is an optimistic chart posted by a Twitter user.
I mean…yeah I agree. There’s still a long way to go before altcoins go parabolic. In fact, I’m salivating for that to happen. I’m confident that there’s still room to go in the broader cryptocurrency market, and we can all profit off of it.
I just want to reiterate and say it could be a good idea to take some profits since things are bound to slow down a little bit. And I want to also remind everyone that we hovered at the “100” level in Altcoin Season Index from April 2017 to March 2018 (January 2018 was the start of the crash). So…maybe your altcoins are about to do a 2x or a 3x. But let’s cash out some of those profits, and turn them into ammo so we can re-buy in if the market ever retraces.
