Is 2021 Going to Be The Year of Altcoins: Altcoin Season
Over $1 trillion! Yikes. That is the combined market cap for cryptocurrencies thus far this year. And we are just a few months into 2021. Little wonder the search “how to buy Bitcoin in India” and “Buy Bitcoin India” are one of the most searched keywords recently. With BTC breaking a new all-time high last 2020, many crypto analysts expected a retraction while expecting that much-needed retrace, it went even higher and setting a new all-time high at $58k. This has not only made it one of the most searched keywords in India but also brought forth many influential investors like JP Morgan talking about BTC.
What is Altcoins season?
Altcoins season refers to a cryptocurrency market cycle where several altcoins (cryptocurrencies other than Bitcoin) experience a sudden surge in price against BTC and the US dollar. With the Bitcoin market cap over $700 Billion and altcoins taking the rest, we could ask: Is 2021 going to be the year of altcoins?
Without fear of contradiction and from all indications of the past and recent market trends one could answer in the affirmative. Not only did BTC fare very well for investors, but many other altcoins also surged and set a new all-time high.
However, we need to understand why crypto analysts and experts are asking if 2021 could be or is the next altcoins season:
Bitcoin Dominance Fell and Altcoins Rise
This is how BTC dominance works: when there is an increase in BTC dominance, altcoins lose value and vice versa. Explained in clearer terms, it is the amount of Bitcoin in the crypto market cap. If you are conversant with the market, you’d see that the dominance of BTC has gone on a downward trend. And this has led many crypto investors to look at the bright side of altcoins and hence are shifting their attention to altcoins.
Also, on the 25th of January, BTC fell to its lowest since September 2020, while altcoins rose. According to Andrew Tu of Quant trading firm who said the drop in BTC market cap could be evidence that some traders are taking their profits from BTC and sowing them into altcoins.
What we have noticed is that while Bitcoin retracted to $30K from over $40K, most altcoins didn’t follow. Even more, when BTC recorded a 30% fall, altcoins had 6.25%. What more, altcoins market volume witnessed a staggering high with over $320 million with BTC at $42K.
The Relationship Between Bitcoin and Ethereum
Another good indication towards altcoins season is the impending Volatility of Bitcoin and Ethereum. After breaking the recent record high of 45% recorded as at 21st of February 2020 to a new record of 46% the Impending Volatility between Ether and BTC at 46% could tend towards a bigger percentage return for altcoins than BTC in the nearest future. After studying the divergence between the two coins, a market analyst has this to say, "The widening of the IV spreads indicates that the market expects ETH and other alternative coins to chart bigger percentage moves than Bitcoin in the near term.''
Another key indicator for alt season
Doge Surge as a sign. Doge also known as the meme coins has gained a phenomenal surge in prices recently, thanks to the several mentions by the Most Influential person on Earth, the CEO of Tesla, Elon Musk.
Elon jokingly added that phrase to his Twitter Bio recently. While most altcoins were performing averagely against BTC, Doge had a good run with almost over 90% ROI against BTC. If history is anything to go by, the report by Cryptopotato shows that in the past crypto market cycle, a surge in the price of Dogecoin often leads to a good run by other altcoins. Sometimes around early July last year, Doge had over 150% surged in price, and in August altcoins started booming.
The Pandemic and Economics Crisis
Unlike the 2017 altcoin season, this is going to be a bit different. Never in the history of the Crypto world has the world been in the throes of global pandemics. The pandemic has usurped the loopholes in the traditional monetary system. Plus, more and more people have lost their jobs. This has led more and more people to educate themselves with new trading equipment and many people have turned to search engines to search how to buy bitcoin in India or how to exchange Bitcoin to INR and while many investors are turning their attention to altcoins.
New Highs for Altcoins Due To DeFi Performance
Recently Defi protocols and other network backing altcoins have been experiencing significant growth (more than $35 billion in assets). And hence this has led to altcoins attaining a new All-Time High while BTC continues to decline from its.
A few weeks back Ethereum gained over 20% gaining a new All-time High by crossing $1600. And even that experts have predicted that ETH has the potential to reach over $2600 according to Michael Novogratz, a well-known hedge fund manager. Other altcoins like UniSwap, Link, Litecoin, Elrond, Cardano, and Stellar are on the verge of closing at new highs and witnessing tons of two figure digits with altcoins price
While this is exciting, and seems promising for anyone with altcoins portfolios, what is more, exciting is the words of Simon Peters, an analyst at Bitcoin and eToro — With institutions expected to add further to their positions, we expect the price of Ethereum to push higher from here."
100-BTC.D Dominance
Nicholas Mertens, a YouTuber, and popular market analyst in his video claimed that the 100-BTC dominance chart points towards what he referred to as an imminent alt season. Nicholas is said to have accurately predicted the recent 2020 BTC bearish runs. As far back as December 2020, Nicholas in his video said that it is not too late to enter and profit from the runs as he had a look at the 100-BTC divergence pointing towards the uptrend and seems to initiate another upward movement. Lo and behold, in January 2021, BTC broke a new All-time High and several altcoins made exponentially upward moves.
Next is over to you, tell us which altcoins you would be buying but no matter the size of your portfolio, make sure BTC is part of it and you can get it from a secure platform like Remitano.