Cryptocurrency analyst Miles Deutscher made a remarkable assessment about the altcoin season, which altcoin investors are eagerly awaiting, in his latest statement.
Deutscher, who claimed that he could predict when the altcoin season would start thanks to the artificial intelligence model he developed, stated that he tested this model by comparing it with previous cycles and that the results were “surprising.”
Deutscher recalled that the altcoin seasons in 2017 and 2021 offered increases of 1,000% to 10,000%, and said that such major movements have not yet been seen in the current cycle. He noted that apart from the partial increases experienced in April and November-December of last year, major altcoins generally performed poorly against Bitcoin.
According to the analyst, there are several key reasons why this cycle is different from previous periods:
- Macroeconomic Conditions: While the pandemic-induced stimulus packages in the 2020-2021 period provided serious liquidity to the crypto market, this situation has been reversed in the current environment with the FED's balance sheet reduction policies.
- Institutional Bitcoin Investments: Bitcoin ETFs and the entry of giants like BlackRock are keeping capital in Bitcoin, which is leading to a weakening of the “capital flow from Bitcoin to altcoins” effect seen in previous cycles.
- Ethereum’s Weak Performance: Ethereum’s failure to make a strong breakout against Bitcoin is preventing the start of a large-scale altcoin rally.
- Low Individual Interest: Scandals such as UST, FTX and the losses experienced in the recent memecoin frenzy caused individual investors to move away from the market.
Miles Deutscher stated that the model called Altcoin Rally Score (ARS), which he developed by taking this data into account, consists of four basic indicators that will trigger the altcoin season:
- Bitcoin Dominance: Bitcoin dominance must fall below 60% and show a decline of 4 points in the 21-day period.
- Ethereum's Leadership: The ETH/BTC ratio must break above the 200-day moving average and make a new 90-day high.
- Altcoin Seasonal Index: If this index rises above 40 and rises for two consecutive weeks, it will indicate a broad-based rally.
- Trends and Individual Interest: Market sentiment, trend momentum, and stablecoin liquidity should show a positive trend.
Deutscher predicts that the new altcoin season, which he defines as 3.0, will be shorter and more selective (sector-based) than previous cycles. He cited both the global liquidity crunch and the fact that the supply of newly released altcoins is much higher than in previous years as the main reasons for this.
*This is not investment advice.
