Alt-Season is Coming to the Cryptocurrency Market, Claims Tom Lee

Bitcoin (BTC) rallied significantly since the start of this month, but many are wondering when altcoins will catch up. Although we know that altcoins tend to follow Bitcoin, the cryptocurrency market generally works in cycles. One of these cycles is the expectation of “alt-season” — when altcoins decouple from Bitcoin and begin to rally, independently. Noted permabull Thomas Lee, based on his analysis, has outlined a few “pre-conditions” which indicate the start of alt-season.

Alt-Season Is Coming

Firstly, Thomas Lee writes in a tweet that, since 2015, one of the strongest indicators for alt-season comes from altcoin correlations with Bitcoin. When the correlation between altcoins and BTC drops, we generally see a rally by altcoins. This drop in correlation has just started recently.

1/ Since 2015, one of the “pre-conditions” for the start of alt-season is a drop in the correlation between Alts and $BTC

This drop in correlation has started recently (lower part of chart and scale is inverted)

This is a data point to suggest alt-season could be underway… pic.twitter.com/g10Fjzx50q

— Thomas Lee (@fundstrat) April 20, 2019

This is the main metric Lee relies on for his argument. Given that Bitcoin’s rally has led to less-than-expected altcoin gains across the board, an alt-season may potentially be coming.

Explosive Gains

The past alt-season in 2017 saw explosive returns, on average, of 1,100 percent. However, will the next alt-season be as strong? Lee seems to think it will. Given that there are only ~50mm active wallets versus some 5B Visa/MasterCard accounts, Lee writes, he believes cryptocurrencies are still early in the adoption curve. What this means is that alt-season could potentially deliver returns similar to the 2017/2018 cycles.

1/ Since 2015, one of the “pre-conditions” for the start of alt-season is a drop in the correlation between Alts and $BTC

This drop in correlation has started recently (lower part of chart and scale is inverted)

This is a data point to suggest alt-season could be underway… pic.twitter.com/g10Fjzx50q

— Thomas Lee (@fundstrat) April 20, 2019

As one replier put it, it really is “feeling a lot like early 2017” all over again. Do you believe alt-season may soon be upon us? Are the indicators lining up to make such a strong prediction like Lee is making? Let us know your thoughts below.  Disclaimer: This article is for informational purposes only and is not intended to be construed as financial advice.