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    Sumit Bera

    Altcoin Season: Opportunity Or Excessive Optimism?

    Altcoin season

    The next round of conversations and news about the new altcoin season began quite recently. After the price of Ethereum surged against Bitcoin on July 9, reputable trader and analyst Peter Brandt stated that this could trigger a new altseason in the near future.

    Peter's Brandt statistics

    What is Altcoin season

    Altcoin Season (aka altseason) means that the price growth of non-Bitcoin cryptocurrencies is well ahead of the BTC price movement. In other words, this is an increase in bullish sentiment for altcoins.

    Which altcoin news was the most significant

    Altcoins have indeed shown significant gains over the past two weeks. The picture shows the main cryptocurrencies (with a capitalization above $700 million), which prices increased most notably.

    Top 10 gainers of the past week

    Most discussed coins in terms of altseason are Cardano (ADA), Kyber Network (KNC), Compound (COMP), Chainlink (LINK). In addition, experts (for example, Joseph Young) also pay attention to the growth of VeChain (VET) and Stellar (XLM) coins.

    Here's an expressive comparison of cryptocurrency price increasing over the week.

    comparison of cryptocurrency prices

    Why altcoins have grown in July 2020

    Reason #1. From April 2020 Ethereum price raised for almost 270%. Traditionally, altcoins increase is associated with ETH active growth. This is due to its market cap and the fact that most of the smaller altcoins are ERC-20 tokens.

    Reason #2. Most of the leading cryptocurrencies are in the midst of key upgrades (e.g. ADA Coin, Stellar). This also improves users' high spirits. For example, Cardano will complete the Shelley upgrade (which should significantly increase its decentralization) by the end of July. In this regard, discussions and optimistic Cardano Coin price predictions have intensified on the dedicated Reddit subforum.

    Another upbeat news and price predictions concern the Chainlink crypto project, which grew significantly last month. Interest in Chainlink coin has increased since the start of the price discovery stage. This term means breaking its own price record and moving into the zone where its price predictions are difficult to build.

    Reason #3. The growing popularity of DeFi in 2020. Because of this, Kyber Network, Compound and some other assets have shown the growth of over 20%.

    Kyber Network's position also improved after the release of Katalyst. It allows users to get benefits from participating in KyberDAO (the platform for staking, voting, and delegation). Santiment (the analytical company) is confident in its optimistic trend.

    Santiment analytics

    As a result, according to Binance Futures, more than 50% of traders on this platform hold long contracts on LINK, ADA, KNC and COMP.

    Kraken's statement also added confidence to users. This exchange not only positively perceives the growth of DeFi, but also on this basis launches the listings of Compound (COMP), Kava (KAVA), Kyber Network (KNC) and Storj (STORJ).

    Also, another sign of the upcoming altcoin season is the drop in the BTC Dominance Index for the last 2-3 weeks (see chart).

    BTC dominance index chart

    Altcoin season: to be or not to be

    Analyst Michael van de Poppe also declares the start of the altseason. In his opinion, altcoins never move all at the same time and fall with any significant movement of BTC. He focused only on technical analysis, so his list is noticeably different from the altcoins that everyone has heard about in recent weeks. Here's his TOP-6 list: Tezos (XTZ), Celer Network (CELR), COTI (COTI), Basic Attention Token (BAT), TomoChain (TOMO) and Harmony (ONE).

    It is worth remarking that crypto optimists have been anticipating the altcoin season for a long time. So, discussions about it intensified both last summer and autumn. However, their moods are swinging. Last year Changpeng Zhao, CEO of Binance, expected a gorgeous altcoin season. This year he believes explosive growth in the new altcoin season will take place only for some unnamed projects.

    There are also tougher points of view. Jason Calacanis, an angel investor at Robinhood and Uber, recently stated that, in his opinion, 99% of crypto projects have no foundation at all because most startup founders don't understand what they are doing. His comment was supported by Kevin Rose, who informed TechCrunch that 99% of projects are working just for profit. They generate a lot of useless assets and this makes it hard to spot really worthy projects.

    Crypto market is increasingly recalling the great altcoin season of 2017-18 when cryptocurrencies grew by 40% per day. Google search queries confirm the growth of interest. However, compared to 2017-18, this year surge is almost invisible.

    Google trends chart

    However, Google Trends show that altcoin searches have hit the second-highest of 2020. As you can see, there is no consensus on whether the altseason is coming soon. But the popularity of altcoins is still growing. For how long and to what limits it will grow is an open question.

    The content of this article is for informational purposes only and should not be construed as investment advice. We ask you to do your research.