Are you wondering if it’s time for altcoins to shine? The question of whether we are in an Altcoin Season is a frequent topic among cryptocurrency investors. A key metric used to gauge this is the Altcoin Season Index, tracked by platforms like CoinMarketCap.
What Does the Altcoin Season Index Tell Us?
The Altcoin Season Index provides a snapshot of the broader crypto market sentiment by comparing the recent performance of altcoins against Bitcoin. It’s a simple way to understand if altcoins, as a group, are currently outperforming the market leader.
As of June 20, 2024, at 00:28 UTC, the index registered a value of 22. This reading is unchanged from the previous day and holds significant meaning for market watchers.
Index at 22: Welcome to Bitcoin Season
An index reading of 22 falls well below the threshold for Altcoin Season. According to the methodology, this indicates that the market is currently in Bitcoin Season. This means that, over the past 90 days, Bitcoin has largely outperformed the majority of altcoins.
How is the Altcoin Season Index Calculated?
Understanding the calculation helps clarify what the index represents. Here’s a breakdown:
- The index tracks the performance of the top 100 cryptocurrencies by market capitalization listed on CoinMarketCap.
- Stablecoins and wrapped tokens (like WBTC) are excluded from the calculation to focus purely on speculative altcoin performance.
- It measures performance over the last 90 days.
- The core comparison is between each of these top 100 altcoins and Bitcoin (BTC).
The index score, ranging from 1 to 100, reflects the percentage of these top 100 altcoins that have outperformed Bitcoin over that 90-day period.
Bitcoin Season vs. Altcoin Season: Defining the Thresholds
The index uses clear thresholds to define which ‘season’ the market is in:
- Altcoin Season: Occurs when 75% or more of the top 100 altcoins have outperformed Bitcoin over the last 90 days. The index would read 75 or higher.
- Bitcoin Season: Occurs when 25% or fewer of the top 100 altcoins have outperformed Bitcoin over the last 90 days. The index would read 25 or lower.
- Readings between 26 and 74 are often considered a transition period or ‘Neither’ season, where performance is more mixed.
With the index currently at 22, it firmly places the market in Bitcoin Season.
What Does This Mean for Altcoin Performance?
A reading of 22 implies that only a small percentage (around 22%) of the top 100 altcoins have managed to perform better than Bitcoin over the last three months. This generally points to a market environment where capital is flowing primarily into Bitcoin, or where altcoins are experiencing larger drawdowns or less significant gains compared to BTC.
Investors focused on altcoin performance should pay close attention to this index, as it suggests a period where picking individual altcoin winners is potentially more challenging, and broad altcoin exposure might underperform Bitcoin.
Concluding Thoughts
The Altcoin Season Index is a valuable tool for quickly assessing the market’s current state relative to Bitcoin and altcoins. Its current reading of 22 confirms we are in Bitcoin Season. While this doesn’t predict future movements, it highlights the recent trend of Bitcoin’s dominance over broad altcoin performance within the top 100. Keep an eye on this index as market dynamics evolve to better understand potential shifts in the crypto market landscape.
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