Are we really in altcoin season?

The situation with the alt season is one dipped in mixed views and a plethora of trading signals. For some people, we're neck-deep in alt season and the end is nigh, while for others like Ben Lily, an analyst at Jarvis Labs, we've not even begun.

Jarvis Labs is a premium destination for crypto traders. They're renowned providers of research, market data, and various trading solutions for their customers. So when one of their top analysts says something, it is important to take a closer look to see if he's right or not and how to react to the information, if you want to.

Chaos

As you know, the crypto market is extremely erratic, but in the midst of the chaos, there's always a pattern. Whether it is from Bitcoin dominance, low market cap rallies, or otherwise, there's always some sort of pattern.

It is also worth noting that what defines an altcoin rally varies between people. This adds an interesting spin to the tale and makes you wonder if making predictions is even worth it. According to Ben Lily in an interview with Cointelegraph;

I believe everybody’s interpretation of what defines an altcoin season varies. For many, altcoin season might exist when both BTC and altcoins move higher. This is opposed to Bitcoin rising while altcoins remain flat or drop.

He further added that

I think this is a fair view of altcoin season, but it’s not necessarily one I subscribe to. Simply because if this is a definition for altcoin season, it’s not a compelling reason for me to move away from Bitcoin and into altcoins from a risk-adjusted perspective

Bitcoin Dominance

Ben went further to highlight Bitcoin's dominance as a viable indicator in determining where we are in the market. According to him, Alt season will take us by "surprise" and right now, we're trading in a range that is "expected". He also pointed out hat we've been in this range since Bitcoin hit the bottom and started to pump.

And because it’s(Bitcoin) trending down, this is good for altcoins as Bitcoin concedes some dominance to other coins.

In Ben's view, Bitcoin dominance is a very important indicator since I determines where the smart money goes. High BTC dominance means you want BTC exposure and reverse the case means money goes to alts. He also highlighted that;

When Ether gains in relation to BTC, this is generally a good sign for altcoins. And recently, there’s been some bullish momentum on the chart within its current range of expectation

We're not there yet

Ben's view somewhat contradicts the current situation we're experiencing where coins like Doge, Vite, XRP, and tens of others have rallied between them, taking the altcoin market cap very close to $1 trillion. Some of them have even done over 100% gain, which to me smells like an altcoin rally but Ben had a different view;

Now, this is a bit different than an altcoin season, in my opinion. That’s because a proper bull run for altcoins is when investors are more likely to walk further out on the risk curve of crypto versus simply buying Bitcoin, not necessarily outsized gains compared with Bitcoin.

He pointed out that the flow of USDT to protocols like Polkadot, and Solana amongst others will be an indicator of a potential alt season. He stated that the reason for this is because;

That’s because many small-cap assets that are very far out on the risk curve, which tend to be bought in these types of environments, will exist on decentralized exchanges rather than centralized exchanges.

However, he further clarified that as time goes on and many altcoins begin to establish themselves with larger market caps, their dependence on Bitcoin will begin to diminish.

Naturally, Ethereum will be the first to almost properly decouple and then when that happens, it will create a benchmark of sorts for other coins to follow. However, this will take an unknown number of years and the decoupling will not be absolute since traded assets always have some effect on each other.

If Ben's right, then it might be important to hold on to some of your bags. You might be in some profit now but imagine if all this is just a Bitcoin thing and not the real thing. It would suck to miss out on a proper rally.

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