4 October 2024
In an analysis shared on X, crypto analyst Astronomer (@astronomer_zero) delves into the question that’s been looming over the crypto community in recents months: “Will we never have a proper altcoin season again?” As Bitcoin’s dominance (BTC.D) continues to surge and altcoins struggle to keep pace, Astronomer provides a data-driven perspective challenging the prevailing narratives that suggest the era of altcoin seasons may be over.
Astronomer begins by acknowledging the difficulties faced by altcoin holders in the current market environment. “Alts are still at low prices and BTC.D is raging up, and yes, ETH (and altcoin) holders are having a tough time,” he notes.
He observes a growing sentiment of disbelief among investors that Bitcoin dominance could decline again, casting doubt on the potential for another altcoin season. “You hear things like ‘BTC ETF changed everything,’ ‘Boomers will not buy altcoins which is why they won’t go up,’ ‘BTC is at ATH and alts have done nothing.’ Which are all things that are easy to say and grasp because they fit the current chart perfectly,” Astronomer explains.
However, he cautions against accepting these narratives at face value. “They give you a sense of comfort and a reason to not hold any alts, which is typically rough during accumulation stages, especially if the BTC chart ‘looks’ a lot better,” he adds.
To provide clarity, Astronomer offers his own definition of an altcoin season: “A true altcoin season is one where liquidity from the most dominant asset (BTC) flows to the other assets (ETH and altcoins). As a consequence, BTC.D drops and nearly all altcoins go up.”
The Case For An Impending Altcoin Season
Astronomer lays out a series of facts to support his argument that an altcoin season is still on the horizon:
#1 Historical Precedence
“First fact: we had the big altcoin season every single cycle (4-year rotation) like clockwork,” he asserts. This pattern is not only evident in historical charts but also in the collective memory of those active during previous cycles. Astronomer cautions against adopting a “this time is different” mindset, which inherently positions investors at a disadvantage. “History rhymes/repeats,” he reminds readers.
#2 Bitcoin Dominance Chart Aligns With 4-Year Cycle
“The BTC.D chart is on track with its 4-year cycle,” Astronomer notes. He previously predicted that a top in Bitcoin dominance would occur around months 34 to 38 of the cycle. “We are now month 33 in the 4-year cycle, which means the tides are about to shift in just a few months,” he points out. Believing that Bitcoin dominance will continue to rise unchecked is essentially betting against established cyclical patterns, according to the analyst.
#3 The Grand Crypto Rotation
“The ‘first Grand Altcoin rotation’ generally happens once per cycle: around Q4 in year 3 of the cycle and is again playing out like clockwork so far,” Astronomer states. He explains that in previous cycles, certain altcoins (a minority) perform strongly early on, driven by specific narratives, while the majority experience significant gains later, fueled by liquidity flowing from Bitcoin.
He cites the 2018–2022 cycle as a prime example. “In this cycle, in the first 3 years, LINK is a great example as it was one of the strongest top 100 altcoins and has put in a 100x, while ETH (and all the other BTC liquidity-driven altcoins) have put in a measly 3x,” he explains. In the last year of that cycle, the dynamics shifted: “ETH has put in a 10x, and LINK has only gained another 3x or so.”
#4 Overrated Impact Of Bitcoin ETF
Addressing the notion that the approval of a Bitcoin ETF has fundamentally altered market dynamics, Astronomer is skeptical. “The BTC ETF narrative to cancel alt season is way overrated,” he argues. He points out that since their launch, ETF total flows have accumulated up to $40 billion, while Bitcoin’s centralized exchange (CEX) volumes average $20 billion daily. “ETF flows are negligible, which is why you never heard me talk about them as I like to filter noise,” he asserts.
#5 Favorable Monetary Policy Looms
Astronomer also highlights macroeconomic factors that could benefit altcoins. “Interest rates are on the decline, the US money supply is increasing drastically (where now also China is following suit). The only thing we are waiting for is QE, which is typically a natural consequence of M2 increasing (with a delay),” he explains. Historically, such monetary conditions have been conducive to altcoin appreciation. “The monetary policy shifting in our favor typically also means altcoins do well,” he notes.
#6 Bitcoin’s All-Time High Is An Arbitrary Indicator
He challenges the idea that Bitcoin reaching an all-time high (ATH) without a concurrent altcoin season signals a permanent decoupling. “BTC being at ATH is an arbitrary gauge to when alt season begins and the fact that it reached ATH but altcoin season hasn’t begun yet is, in my opinion, not valid to call it canceled,” Astronomer argues. He emphasizes that time and cyclical patterns are more significant factors than price milestones.
At press time, Bitcoin traded at $61,129.