After BTC and ETH double breakthroughs, there is a small correction. Is the cottage season coming?
Last week, Bitcoin broke through $31,000, and Ethereum broke through $2,100, hitting new highs in the past 10 months, which greatly stimulated the market's trading sentiment. Various slogans such as "Niuhui" resounded through the major encryption communities. Although Bitcoin and ETH have pulled back by 10% in the past two days, the market is still bullish. And for friends who are full of various counterfeit coins that follow the decline but not rise, they can only silently watch the hustle and bustle that does not belong to them with the expectation of the coming of the "Counterfeit Season".
Here comes the question, with BTC and ETH both breaking through, is the cottage season really coming?
Altcoin Season (Altcoin Season), that is, the period when the price of altcoins rises sharply and outperforms Bitcoin. Altcoins in a broad sense refer to other cryptocurrencies other than Bitcoin, including ETH, BNB, etc.; in a narrow sense, altcoins refer to other cryptocurrencies excluding BTC and ETH (this article adopts No. two definitions).
An important indicator to measure the altcoin market is Bitcoin Dominance (BTC Dominance), which is the proportion of market value. In the early days of the crypto market, Bitcoin’s dominance was close to 100%; but this dominance has declined as the altcoin market has grown. therefore,If BTC's market capitalization ratio drops (and falls below 50%), it means that copycat season may begin.
According to Tradingview data, since the beginning of this year, BTC's market value has risen from 41% to 49% (April 13).
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(BTC's market capitalization ratio in the past two years)
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(BTC market capitalization ratio/Altcoin market capitalization ratio)
But it seems too early to say that this year's copycat season is coming.Past data shows that the market value trend of altcoins is consistent with that of Ethereum. In particular, the DeFi wave in the midsummer of 2020 is first driven by Ethereum, and the market value of altcoins has increased significantly.
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(Ethereum Trend / Altcoin Trend)
According to the past market trends, Odaily divides the market development into four stages: the first stage, funds flow into BTC, the price soars, other altcoins do not follow the rise, there is a blood-sucking market, users' confidence in "Niuhui" is not enough, Still in a wait-and-see state; in the second stage, funds flowed slowly to ETH, and the exchange rate between the two was pulled repeatedly. In the end, the trend of ETH gradually became stronger than that of BTC, market confidence recovered, and users began to gradually believe that the market would recover; in the third stage, funds began to gradually flow into some market capitalization Larger mainstream currencies, these projects have begun to release various fundamentals, such as new stories, new concepts, halving, etc., to achieve a sharp rise in price, and at this stage ETH has always hesitated to BTC; in the fourth stage, some fundamentals The strong tokens began to rise first, and then various altcoins ignoring the fundamentals crazily pulled the market, and the market completely entered a frenzy stage.
From a large cycle perspective,We are still in the transition period from Phase 1 to Phase 2——After March of this year, traditional banks have attracted a large number of safe-haven funds into Bitcoin, which has become the catalyst for the first wave of market prices; and ETH has outperformed BTC for a short period of time only last week. The current ETH/BTC exchange rate is also in a downward trend. As for the so-called "Counterfeit Season", it is an illusion in a short period of time.
