That's a question I get plenty of times, and it's a controversial one.
I get it. You're afraid of selling too early or too late, right?
Let's dive into some data from the past cycles to get a compass for the future.
🔸 Byproduct of human's greed
Read that title again, then read it twice.
Now you have the perfect definition of what an altseason is.
It's not something that happens during the first or middle phase of the cycle where Bitcoin takes the spotlight. It's the final stage. This is logical because retail investors only start paying attention when $BTC breaks its previous ATH and media attention explodes. This "forces" them to look for cheap coins that can turn them into intraday millionaires.
[Insert a relevant chart here showing the correlation between BTC's ATH break and a drop in BTC Dominance, a key signal for risk-aversion and retail inflow.]
🔸 The Ethereum/Bitcoin pair
One of the biggest signals for evaluating if we're entering an altseason is looking at the BTC Dominance to drop, but also at the $ETH/BTC breakout, which are inversely correlated.
By looking at the past two cycles, we can find an interesting data point: the parabolic move made by $ETH /BTC which leads the entire altcoin sector to rise, lasts approximately 40 days, give or take.
[Insert a chart showing ETH's parabolic move in green/red, and the OTHERS chart (representing the pure altcoin market) in black.]
🔸 "Wait, does this mean we only have 40 days to make money?"
Well, no.
If you look at the OTHERS chart, you can see that historically, from when it leaves the accumulation stage to the peak of the expansion stage, approximately 500 days pass. This means that if you're positioned since the accumulation stage (4-6 months prior to the halving is the sweet spot), you'll likely enjoy big profits all the way up, without stressing too much about the perfect top.
What's interesting to notice here is that it seems we already left the accumulation stage, and projecting another 500 days of expansion would put the altcoins top around Q1 of 2025 (to be taken with a pinch of salt). But if we peak earlier than the common cycle, this can be a potential outcome.
🔸 In conclusion, what can we learn?
Focusing on how long an altseason can last isn't the best way to approach the market, as it will likely "force" you to wait for the perfect moment to sell everything, severely increasing the risk of selling too late.
What matters, in my opinion, is positioning ourselves earlier than the masses and then evaluating:
When BTC breaks its previous ATH
When BTC Dominance starts to drop
When OTHERS starts to go parabolic
When $ETH/BTC starts to outperform
All of these four signals are crucial for determining when we have to raise our attention threshold and start looking for ways to de-risk from the market. This is also when your hairdresser will start asking for financial advice and celebrities will begin promoting crypto projects.
Just take note—and this is one of the most important things—that retail will not look for HTF closure below key zones (🔨). That's why they'll become the exit liquidity.
