How to Read the Altcoin Index: When Will "Altcoin Season" Arrive?
4 min read · · Korean original
Contents 4
The altcoin index is an indicator that tracks how altcoins as a whole are moving, excluding Bitcoin. You can check it with TradingView's TOTAL2 chart or with Blockchain Center's Altcoin Season Index.
In this post, we'll look at exactly what the altcoin index is and how to read and use it. We'll also cover how to use it together with Bitcoin dominance and the ETH/BTC chart.
1. What Is the Altcoin Index?
As the name suggests, the altcoin index is an indicator that combines the market capitalization of all coins except Bitcoin. A well-known example is TOTAL2 on TradingView, which lets you see the current trend of the altcoin market at a glance.
You can also use the Altcoin Season Index from Blockchain Center to check the performance of the top 50 altcoins as a number. If 75% or more of those coins have outperformed Bitcoin over the past 90 days, you can consider it altcoin season.
2. How Do You Read the Altcoin Index?
① TOTAL2 (TradingView)
The TOTAL2 chart on TradingView shows the total crypto market cap minus Bitcoin. This also includes the market cap of stablecoins such as Tether (USDT). If you want to see an altcoin index without stablecoins, check the TOTAL2ES chart.
② Altcoin Season Index (Blockchain Center)
You can check the Altcoin Season Index on Crypto Terminal or Blockchain Center. The index is shown as a value between 0 and 100. A reading of 25 or below indicates a bear market, and 26 to 75 is neutral. A reading of 76 or above means altcoin season.
3. How Can You Use the Altcoin Index?
The altcoin index isn't just about seeing "whether altcoins are going up right now." When you read it together with supporting indicators like Bitcoin dominance and the BTC/ETH chart, you can build a much more well-rounded strategy, from understanding market flow to deciding when to enter.
① Understanding Market Flow
The crypto market doesn't always move in one direction. Sometimes only Bitcoin rises while altcoins stall or fall, and other times altcoins rise far more than Bitcoin. In these situations, the altcoin index is a useful tool for judging the market mood objectively.
- If the Altcoin Season Index is 75 or above, altcoins are showing strength across the board.
- If it's 25 or below, on the other hand, it's a sign that the market is strongly Bitcoin-driven.
Looking at Bitcoin dominance at the same time makes the picture even clearer. If dominance falls while the altcoin index rises, an "altcoin season" is more likely. On the other hand, if dominance rises while the altcoin index falls, it's still too early to expect a bull run.
When Ethereum is outperforming Bitcoin on the BTC/ETH chart, it shows that investor sentiment toward altcoins as a whole is getting stronger. Ethereum in particular is the asset that represents the altcoin market, so when ETH is stronger than BTC, it often acts as a positive signal for other altcoins as well.
② Timing Your Entry
Once you've got a read on the market mood, the next important thing is market timing, meaning when to enter. So how can you use the index for this?
- If the Altcoin Season Index is rising, you can take it as a sign that the market is rotating into altcoins.
- If the TOTAL2 chart is also trending upward, it means real money is flowing into the altcoin market as a whole.
To sum up, you can consider entering when the Altcoin Season Index and TOTAL2 are rising together. On top of that, if the BTC/ETH ratio is falling as Ethereum gains strength, and Bitcoin dominance is declining, altcoin season is more likely to arrive.
| What to Check | Bull Market | Bear Market |
|---|---|---|
| Altcoin Season Index | 75 or above | 25 or below |
| TOTAL2 chart | Rising | Falling |
| BTC/ETH ratio | ETH stronger than BTC | BTC stronger than ETH |
| BTC dominance | Falling | Rising |
Wrapping Up
The altcoin index is a tool that brings together the overall flow of the altcoin market. TradingView's TOTAL2 chart is useful for analyzing "altcoin market cap and money flow," while Blockchain Center's Altcoin Season Index is handy for judging whether "altcoin season" has arrived.
It's best to use the altcoin index together with Bitcoin dominance, the ETH/BTC chart, the Fear & Greed Index, and similar indicators. That said, it's a stretch to make investment decisions based on this index alone, so it's important to keep track of the market in real time and put a proper risk management strategy in place.
