With Bitcoin dipping below $ 12,000 in the past few days and dropping to $ 11,400, altcoins appear to have lost momentum even after their impressive gains since early 2020. However, some believe that an “alternate season” is still alive. Well, cryptocurrencies still have room to grow even after tokens like Chainlink and others have grown by more than 100%.
The stronger dollar could be the main culprit behind the recent fall in Bitcoin (BTC) prices, with safe haven assets like gold falling as well. However, many believe a weak dollar is a possibility, especially when the US stock market is overestimating. Hence, the old season will likely continue along with Bitcoin to get going again.
Although an alternate season outperforms altcoins in bitcoins performance, it usually occurs when the value of bitcoin itself increases. Most major digital currencies are pegged to Bitcoin, and when BTC goes up, some Altcoins jump higher and vice versa. Jonathan Hobbs, author of The Crypto Portfolio and former digital assets fund manager, told Cointelegraph that the boom was due to three factors:
“First, the altcoin charts looked good, with Ethereum leading the way. We saw the dominance of the top 100 altcoins over the Bitcoin chart break out of a two-year bearish channel in July. Second, there was a lot of hype surrounding DeFi projects like Chainlink, Aave, and SNX. Third, since the March crash, Bitcoin has either rebounded or traded in an area that is usually good for altcoins in relation to the dollar. But if Bitcoin went down from here, we can see Altcoins go parabolically more difficult. “”
What is driving the recent boom and does it only affect certain sets of tokens or assets with certain characteristics? Here’s a closer look at the upcoming season of alternatives as Bitcoin’s dominance continues to drop to an annual low.
In 2017, as Bitcoin price soared to an all-time high, several other digital assets gained in importance, many of them related to initial coin offerings or other forms of fundraising. Some of these assets massively outperformed Bitcoins and continued to appreciate in value as BTC began to decline.
BTC started losing its market capitalization dominance in February 2017, falling from 86% at that point to 50% to 60% by the end of 2017 during the rally. After the price drop, Bitcoin’s dominance fell to less than 35% in January 2018, before she recovered in 2018 and 2019.
While Bitcoin’s dominance has been decreasing since early 2020, it is currently at 58%, far from its 2018 lows. The market is also different from 2017 as exchanges and other places have raised and regulated their standards Dissemination of investment options. In alternative currencies. Ryan Watkins, research analyst at Missary, told Cointelegraph that the projects themselves also show significant improvements:
“The biggest difference between this bull market and the last bull market (2017) is that the market rewards living products with the accumulation of legitimate value. Many protocols actually generate cash flows for users. This is a big difference from 2017 vaporware projects that raised ridiculous amounts of money without anything but a blank sheet of paper. “”
Throughout 2017, hype and greed fueled much of the rally. As ICOs have brought amazing returns for investors, more money has been poured into the alternative currency market. The fear of getting lost has led many to invest during this time, and while many were left with huge pockets of worthless tokens – most of them on the Ethereum blockchain – more and more Ether (ETH) wallets are making more money than bitcoin wallets money. . According to Ilya Abugov, Open Data Leader at analytics platform DappRadar, the previous alternate season was created by the hype, and there are some similarities to the current season. He said to Cointelegraph:
“I think we’re seeing a lot of similar negative dynamics. Projects are starting to collect attractive features towards. The quality is being checked less and less. In addition, the regulatory aspect seems to be largely ignored.”
Alternative season or DeFi season?