Bitcoin Superiority Could Kill Alt Seasons

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  • Bitcoin dominance has been in an uptrend since January 2018
  • As a result, alt season returns are diminishing, with windows shorter and less profitable
  • Bitcoin’s popularity to outside investors could kill off alt seasons as we know them

‘Alt season’ is a phrase that gets any red blooded crypto trader salivating, bringing about the possibility of three or even four-figure returns. However, Bitcoin’s recovery from the first huge alt season in late 2017 has ensured that alt season windows are getting shorter and less profitable, with the potential for them to become extinct in the not too distant future.

Bitcoin Dominance Enjoying Three Year Growth

The clearest way to illustrate how Bitcoin dominance is killing alt seasons is with the Bitcoin dominance chart:

btc dom

The huge red candle in late 2017 was the alt season that saw some alts put on thousands of percent in December after Bitcoin topped out at $20,000. Alt coin dominance raced to 64.6%, the first time Bitcooin’s dominance had been savaged in such a way, with alts taking 35% of Bitcoin’s market share in the process.

The next alt season took place in May 2018, although this only took 11% off Bitcoin’s market share. The alt season following this, which took place between December 2019 and February 2020 saw 9% taken back by alts, although a better performance of 13% was produced by alts between May and August of this year.

2021 to be Shortest Alt Window?

Assuming that Bitcoin dominance has topped here and begins to reverse in early 2021, it’s clear that the alt season window is on course to be the shortest yet, and potentially the most disappointing. If the trend holds, then we may only see some 5-6% of market share reclaimed by alts before Bitcoin starts again:

btc dom 2

If this trend does indeed hold, then there is also the possibility that Bitcoin breaks above the 72% resistance following the next alt cycle. It has hovered around this area on four separate occasions since 2017 but never once has broken through. However, with Bitcoin being the only girl anyone wants to take to the dance at the moment, there is every possibility that the next time it knocks on the door it will be let through, leading to Bitcoin reclaiming 80% of the market domination or even above. If Bitcoin were to achieve this it is not hard to see it holding this position of power for a considerable time, unless another coin managed to achieve the same level of importance to outside investors.

Such a rise in domination would destroy alt coin valuations in the process, and would lead to many being wiped out for good. Alt coin holders – you have been warned.