- The hypothetical timeline of Altcoin season revealed that a real run-high may yet to begin
- Bitcoin would have to get much bigger to sustain the kind of altcoin seasons of the past
With Bitcoin [BTC] As they fight for control of the $100,000 level, altcoins have had time to move higher. However, this is a common phenomenon: in a bull run, most altcoins are at a standstill when BTC is trending higher, and vice versa. It fits well with the idea of capital rotation in the crypto market.
The altcoin seasonal index showed that it has been altcoin season for almost two weeks, but the value had already dropped to 71 at the time of writing.
However, this doesn’t mean the cycle is over and it’s time to sell – far from it.
Altcoin seasonal timeline and the fuel that would power it
Stablecoins are critical to the crypto ecosystem. They provide a safe haven against volatility, ensure liquidity in the market and enable DeFi activities. An increase in stablecoin flows to exchanges is bullish and a sign of increased purchasing power.
For example, we can see the Tether [USDT] foreign exchange reserves have soared in the past three months.
Zooming in on the 2020-21 period, the increased currency reserves of Tether, one of the most popular stablecoins, coincided with a full-fledged altcoin season. Minting stablecoins and them transfer from the treasury to centralized exchanges helps with liquidity and facilitates transactions, and is the ammunition for big buyers.
The jump in reserves in February 2021 was similar to the last two months, and it is possible that the real altcoin season is yet to come. In the previous cycle, it took place in May and November 2021. This time too, we may have to wait for the second and fourth quarters of 2025 for jaw-dropping gains like last time.
Market capitalization targets for 2025
Source: TOTAL3 on TradingView
As of the 2018 high, the altcoin market cap (excluding Ethereum [ETH]) reached just past the 223.6% expansion level of $1.12 trillion in 2021. Similarly, based on the 2021 run, AMBCrypto found that the 2025 target at the 223.6% expansion level was $3.47 trillion amounted to.
Read Bitcoin’s [BTC] Price forecast 2024-25
If the previous cycle repeats itself, we can expect altcoin market capitalization to reach these levels within the next ten months. It’s possible that once the US tax season is over in April, all tax-related sales will decline and participants will re-enter as buyers, causing prices to rise through early summer.
“Sell in May, walk away” also applies to the crypto market. It’s best not to rely too much on historical evidence, as different summers yield different returns. However, investors should plan to sell some of their holdings in May and November while keeping an eye on long-term price trends.