Bitcoin
BTC$22 794.78

-4.60%

Ethereum
ETH$1 553.83

-5.95%

Tether
USDT$1.000104

-0.01%

Binance Coin
BNB$304.99

-4.44%

USD Coin
USDC$0.999890

-0.03%

XRP
XRP$0.394508

-5.29%

Why Bitcoin's next breakout may not be an altcoin season signal


07 Jun 2021

#Bitcoin

Many investors rely on bullish breakouts from Bitcoin as a sign of the next altcoin season but data suggests this strategy is flawed. On April 14, Bitcoin (BTC) reached a $64,900 all-time high after accumulating 124.5% gains in 2021. However, a 27.5% correction followed over the next eleven days, marking a $47,000 local bottom.

The popular Crypto Fear and Greed Index reached its lowest level in 12 months on April 25, signaling that investors were closer to "extreme fear," which was a complete reversal from the "extreme greed" level seen during the Bitcoin rally above $60,000.

This downward move from April 14 to 25 wiped out $200 billion from the altcoin market capitalization. Still, the recovery that followed could serve as a guide on what to expect when Bitcoin finally manages to exit the sub-$40,000 level. Altcoins posted a similar trend, bottoming at $850 billion on April 22 but fully recovering to a record $1.34 trillion high on May 10. There is no guarantee that this pattern will repeat, but there is no better source of information than the recent market itself.

Cheaper is not always better

Many investors believe that altcoins consistently outperform when Bitcoin price takes off, but is that an absolute truth? Although that has been the case in 2021, Bitcoin was the clear winner in the last quarter of 2020 as it surpassed the broader market by 110%. However, analyzing the winners from the late-April bull run could provide interesting insights on what to expect for the next rally.

Among the top-100 tokens, Ether Classic (ETC), Polygon (MATIC), Waves, and Fantom (FTM) were the clear winners. The winners were either scaling solutions or smart contract platforms, and the sector leader Ether (ETH) also outperformed the market.

80% of the worst performers were sub-$1 coins which is precisely the opposite of investors' usual expectations. There's a persistent myth that cheap, nominally-priced altcoins will excel during altcoin rallies, but that clearly was not the case.

Timing the market is impossible

Unfortunately, there is no way to predict when the current correction will be over, and altcoins historically do not usually excel during bear trends. This means calling 'alt season' at the first sign of Bitcoin's price recovery is an inaccurate strategy that can lead to financial ruin.

A general rule of thumb for an 'alt season' kick-off is two or three consecutive days of 30% or higher accumulated gains on cryptocurrencies with little-to-no development, including Dogecoin (DOGE), Litecoin (LTC), and Ether Classic (ETC).


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Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 60.4% 84 $22 794.78 -4.60% 0.16% $439 421 744 135 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 62.4% 84 $1 553.83 -5.95% -3.88% $190 147 661 417 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 94.4% 1 $1.000104 -0.01% 0% $67 783 099 946 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 65.6% 66 $304.99 -4.44% 0.23% $48 158 717 061 BNB 7 days price change
5 USD Coin (USDC) USDC USD Coin predictions 92% 1 $0.999890 -0.03% -0.01% $42 871 511 347 USDC 7 days price change
6 XRP (XRP) XRP XRP predictions 65.6% 68 $0.394508 -5.29% -7.09% $20 042 407 520 XRP 7 days price change
7 Binance USD (BUSD) BUSD Binance USD predictions 94.8% 1 $1.000163 -0.07% 0.02% $15 378 516 452 BUSD 7 days price change
8 Cardano (ADA) ADA Cardano predictions 62.8% 76 $0.372102 -6.15% -0.25% $12 872 392 418 ADA 7 days price change
9 Dogecoin (DOGE) DOGE Dogecoin predictions 64.4% 68 $0.086947 -3.87% -0.56% $11 535 298 125 DOGE 7 days price change
10 Lido stETH (STETH) STETH Lido stETH predictions 93.6% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
11 Polygon (MATIC) MATIC Polygon predictions 63.6% 77 $1.085935 -8.18% 10.16% $9 484 901 320 MATIC 7 days price change
12 Solana (SOL) SOL Solana predictions 54.8% 91 $23.55 -10.47% -2.36% $8 752 068 592 SOL 7 days price change
13 Polkadot (DOT) DOT Polkadot predictions 58.4% 85 $6.14 -8.11% -7.79% $7 076 486 593 DOT 7 days price change
14 Litecoin (LTC) LTC Litecoin predictions 69.2% 63 $90.05 -7.19% 0.74% $6 498 956 549 LTC 7 days price change
15 Avalanche (AVAX) AVAX Avalanche predictions 60% 81 $20.20 -3.78% 14.48% $6 357 771 856 AVAX 7 days price change

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