The Altcoin Rotation is a theory based on the idea that the bull market cycle for cryptocurrencies will be as follows: the rise of Bitcoin, then the rise of Ethereum, and then the rise of altcoins.
This idea is widely circulated in the market, so many wonder about its validity and whether it is really true.
Therefore, in this article, we will discuss these details in depth and explain what the expectations are.
What are altcoins?
Altcoins refer to any coins that are not Bitcoin. This term emerged in the early market when the number of coins in the market was in the dozens.
But currently, the cryptocurrency market includes thousands of coins, so the term altcoins now encompasses a very long list of coins.
Is the altcoin cycle real?
Yes, but it's not as you expect.
The idea that liquidity is distributed among altcoins after the rise of major coins like Bitcoin and Ethereum was true in the early market, but as the market evolves, its effectiveness decreases more and more.
The reason for this is simply that as the number of altcoins increases, the distribution of liquidity to them becomes less effective.
So what is happening recently is that in every altcoin cycle, a certain sector captures most of the liquidity.
What is the current state of the altcoin market?
CoinMarketCap has an index called the Altcoin Season Index.
The idea of this index is that it measures the performance of the top 100 cryptocurrencies compared to Bitcoin.
If the performance of more than 75 altcoins is better than the performance of Bitcoin, it means we are in an altcoin season.
And if the performance of less than 25 altcoins is better than the performance of Bitcoin, it means we are in a Bitcoin season.
Currently, the value of the Altcoin Season Index is 20, meaning we are still in a Bitcoin season.
