With the most recent three- digit increase in multiple altcoin value , we focus on four possible reasons that indicate the start of the 2021 altcoin season.
↪️2 Trillion Dollars
The cryptocurrency market is on fire. Market capitalization exceeded $ 2 trillion for the first time in its history.
Interestingly enough, this was mostly led by alternative coins or altcoins and its value rose. Bitcoin, on the other hand, failed to surpass $ 60,000 many times over the past month, and the altcoin gave serious value to the idea that the 2021 season is unfolding.
#CryptoPotato reported in January of this year that Secrets of Crypto, one of the well-known and respected cryptocurrency analysts, has just begun the altcoin season for 2021 and looks right so far.
With that in mind, let's take a look at a few reasons why the situation could be this way.
↘️1-Year Lowest Bitcoin Dominance
Bitcoin dominance is the best measure to measure the relative strength of altcoins at any given time. This is a measure of bitcoin's share compared to that of the entire market.
The index currently stands at a 1-year low below 56%. This last happened in April 2020.
It is also important to note that the BTC dominance index dropped below a critical rising support trend line just a few days ago, allowing altcoins to gain even more strength.
The drastic decline in Bitcoin's dominance has allowed many altcoins to increase both the USD value and the BTC value. This is true for large, medium and even small-sized cryptocurrencies. Therefore, recent developments are a sure sign that the altcoin season is under construction and is bringing us to our next point.
As can be seen in the BTC dominance chart below, there is more room for the price to drop compared to the biggest altcoin season ever taking place at the end of 2017 and January 2018.
↘️Huge Altcoin Gains
Cryptocurrencies with medium or lower market capitalization have definitely exploded in value over the past few weeks. In fact, the fluctuations are very sudden and there are many examples of this.
The latest example came from WazirX. With a total market value of approximately $ 1.07 billion, the project has grown 1400% in the past month alone.
What's even more interesting is that it is the 97th largest project and still has a billion-dollar market value. This shows how the entire cryptocurrency space has grown in the last few months and has doubled itself in the last two months alone.
But the examples don't stop there - we've seen larger projects like BitTorrent increase by more than 2000% in a few months and almost 750% in a week. There are many other examples like THETA, Filecoin, and so on.
This shows that capital flows from Bitcoin to altcoins very precisely. It is also one of the strongest signs that an altcoin season is approaching.
↘️Flow of Crypto Capital Flows
All of the above fits very well with a narrative widely spoken by analyst SecretsOfCrypto. In a February post, the analyst outlined the flow of capital and how this happens during altcoin super cycles.
We can already see the money going from Bitcoin to other cryptocurrencies, which is perfectly demonstrated in declining BTC dominance. It also explains the market psychology and how interest is changing and accelerating towards altcoins.
Data from Google Trends also confirms this:
As seen above, interest in "altcoins" is increasing throughout 2021. The good news is that there may be more room to grow towards its peak in late 2017.
↘️2017 ICO Explosion and 2021 NFT Explosion
This is another important signal that the altcoin season is in bloom. In late 2017 and early 2018, we saw a large number of tokens offered through initial cryptocurrency offerings (ICOs) for massive gains. In fact, this may be the biggest trend of the epic bull run, except for the first time Bitcoin hits $ 20,000 in history.
Now, there is another trend that seems to have surpassed the ICO hype: NFTs.
It was stated in early March that NFT saw higher retail interest than ICOs in 2017-2018.
This was highlighted by the sale of Beeple's NFT, "Everydays: The First 5,000 Days," worth $ 69 million