The Altcoin Cycle: Historical Patterns Show When to Expect the Next Boom

• Altcoins typically surge towards the end of market cycles, as seen in both 2017 and 2020/21 runs.
• ETH/BTC’s parabolic moves are key indicators of upcoming altcoin growth, often signaling the start of altseasons.
• Institutional presence hasn’t fundamentally changed market dynamics, as smart money was active in past cycles too.

The narrative that “altcoins are dead” and “it’s all about memes” has gained traction among some crypto enthusiasts as highlighted by ZERO IKA, an analyst. However, historical patterns suggest a different story. During the 2020/21 bull run, despite the overwhelming pessimism, specific trends indicated potential growth within the altcoin sector. 

In the 2020/21 run, altcoin narratives such as DeFi, governance tokens, and oracles dominated the scene. Meanwhile, 90% of altcoins suffered significantly. The sentiment was overwhelmingly negative, and many doubted the possibility of an altseason or even a small sector rise. 

The TOTAL 3 index, which tracks the total market cap excluding Bitcoin and Ethereum, struggled to break the complacency shoulder resistance. This resistance level was crucial in determining the overall sentiment and potential for altcoin growth.

ETH/BTC plays a pivotal role in gauging altcoin strength. The parabolic move of ETH/BTC often signals the beginning of significant growth for altcoins. During the 2020/21 run, this parabolic move started only near the cycle’s end. This trend is consistent with previous cycles. The vertical lines drawn on the charts clearly show this behavior.

For those who missed the 2017 bull run, historical BTC pairs provide valuable insights. Komodo’s BTC pair, for instance, remained stagnant in 2017 before surging at the cycle’s end, coinciding with TOTAL 3 and ETH/BTC movements. 

Similarly, in 2021, TRX’s BTC pair saw exponential growth only after ETH/BTC initiated its parabolic move and TOTAL 3 approached the cycle’s end. Numerous other altcoins exhibit this pattern, moving significantly towards the end of the cycle, barring a predominant narrative that boosts their performance.

The notion that institutional involvement has fundamentally changed the game is also worth addressing. Smart money was present in both 2017 and 2020. Their influence has always been a part of the market dynamics. Consequently, the current market behavior aligns with historical patterns, indicating that institutions’ presence has not drastically altered the cycle’s nature.