Altcoin season officially started, so beware of a Bitcoin correction

Altcoin season is the period when altcoins traditionally outperform Bitcoin in terms of price growth. The official definition is that three-quarters of 50 of the largest altcoins must outperform Bitcoin over the last three months. Since the beginning of September, Bitcoin has added about 70% to its price. Many altcoins however did much better.

Lagging

Do note that, as always, ‘altcoin season’ is a ‘lagging indicator’. This means that the moment we officially talk about ‘altcoin season’, there is already a risk of a Bitcoin correction. In the past, we often saw this: Bitcoin rises steadily over a period of several months, after which altcoins are snapped up by new investors looking to diversify their crypto portfolio.

Because altcoins have a smaller market capitalization, these digital coins can often increase in price more quickly during a Bitcoin bull market.

So when altcoin season starts, we have normally already entered the consolidation phase of Bitcoin.

Right now it seems to me that Bitcoin has been stuck between $93k and $99k for a week and a half and cannot break through. The risk of a correction is brewing. If that were to happen, altcoins would fall much faster. So pay close attention to volatility.

The altcoins that performed best in the most recent period were Stellar, Dogecoin, XRP and ADA (Cardano) to name just a few. The ‘American’ coins in particular had a very good autumn.