$10 billion that's the amount of crypto liquidations that just occurred last month this is the largest flush that the cryptosphere has ever experienced more than five times larger than the liquidation the crypto Market experienced following the FTX collapse in November 20122 the recent liquidation was just a part of a larger correction that actually began in December 2024 since then Bitcoin has corrected by more than 20% and all the other coins excluding bit coin have corrected by more than 35% so in the recent weeks the altcoin market has actually experienced most of the pain in fact
over $234 billion was wiped out last month from the altcoin market in just the span of 2 weeks this is the largest decline in the altcoin market cap since the Luna collapse in May of 2022 now many analysts and media Outlets are calling for an ALT season to be cancelled but while sentiment is at extreme fear there are still major catalysts emerging in the crypto space just recently Trump announced a strategic crypto Reserve signaling that the US government is including crypto in the financial system this kind of recognition is something we've never seen in past
Cycles suggesting that despite the short-term pain crypto's adoption is still accelerating so is this really the end of the bull run for altcoins or actually the beginning of one well to answer that we have to first understand what an ALT season is alt season refers to to a phase in the crypto Market when altcoins significantly outperform Bitcoin this typically occurs when Bitcoin dominance so the percentage of the total crypto market cap held by Bitcoin starts declining this is what we saw throughout 2017 especially towards the last quarter when Bitcoin dominance fell in almost a straight
line and when we look at what altcoins were doing that time we can see that they were Rising throughout this period with over a 600% gain just in the last 3 months we also saw this in 2021 when Bitcoin dominance was falling and that coincided with the 700% runup in altcoins a falling Bitcoin dominance signals that investors are shifting funds from Bitcoin into altcoins while a rising dominance suggests money is flowing back into Bitcoin leading altcoins to underperform the typical bull cycle begins with Bitcoin pumping first causing the Bitcoin dominance to rise and altcoins to
underperform a true Alt season then comes after a significant rise in Bitcoin when price is consolidating or topping out and Bitcoin dominance is falling like in 20121 eventually the market tops with both Bitcoin and altcoins crashing but altcoins Falling much more severely causing the Bitcoin dominance to rise and reset the cycle so alt seasons are basically periods when investors take profits from bitcoin's major rally and rotate Capital into smaller higher risk cryptocurrencies to change case bigger returns this cycle is driven by increased risk appetite and the perception that altcoins which often lag behind Bitcoin initially
will eventually outperform due to their smaller market caps since 2023 Bitcoin dominance has been consistently Rising going from 39% to 61% so not really signaling an ALT season at any point so our opinion is actually that Bitcoin can continue rising in the coming months alongside a rising Bitcoin do Min until we get a peak in Bitcoin and if that's the case then the real alt season would come down the road when heavy profit taking occurs on bitcoin and Retail interest shows up for altcoins one way to track retail interest for altcoins is through Google search
trends for the term altcoins during periods of extreme risk on in the crypto Market retail interest in altcoins naturally starts to Surge for example around the massive alt seasons of 2017 and 2021 searches for altcoins spiked both times this search index crossed 70 telling us that retail was heavily pouring in capital into altcoins a few months ago we saw a similar increase in altcoin searches but this time it barely reached 50 before interest began fading this suggests that retail fomo so the fear of missing out typically seen during Peak alt seasons is yet to fully
kick in now that retail sentiment has reset and a true alt season is still ahead we're already Scouting For the best risk-reward setups in the altcoin space one interesting trade on our radar right now is Litecoin back in November 2024 Litecoin surged 105% in just a few weeks since then it's been consolidating between $80 and $137 forming what's known as a bull flag this is a continuation pattern that signals potential for another strong move higher a confirmed breakout above $137 would be our trigger for an entry with a stop loss just below that breakout level
for the bull flag Target we simply measure the percentage gain of the initial move so 105% which puts Litecoin back at its November 2021 highs around $282 of course this pattern is only valid as far as the $80 support level holds but here's the thing when taking on higher risk in altcoins the goal isn't just for the coin itself to move up it's also to outperform bit coin and that's where this chart comes in it tracks litecoin's performance relative to bitcoin and for the last 6 years this ratio has been in a steady downtrend underperforming
Bitcoin by as much as 96% that changed in November 2024 when Litecoin rallied 60% in just a month since then the Litecoin to bitcoin ratio has been forming a basing pattern similar to what we saw back in 2022 before a sharp spike a move back to just this downtrend line would mean a 70% outperformance by Litecoin against Bitcoin so from both a USD and Bitcoin perspective litecoin's setup looks pretty constructive but Litecoin isn't the only setup we're watching there's another altcoin that's already broken out of its long-term downtrend and is now retesting its breakout level
this altcoin is called Curve or CRV this is a platform that helps people swap stable coins and other cryptos with low fees and minimal price slippage and in the past 5 years the 36 Cent price level has been quite important it acted as support 1 2 3 4 five six times until price finally broke below it in June 2024 leading to months of sideways accumulation before a 400% rally in November 2024 since then CRV has retraced by about 60% of the move but this looks like a retest of the long-term breakout and the 36 Cent
support level a trade here with a stop loss below this breakout line and an initial Target between $120 and $140 could prove very profitable in fact if we do get a full-blown alt season by then it's not impossible for CRV to reach its next resistance level around $288 this would basically be a similar percentage move to what we saw in the November 2024 rally here just like with Litecoin we also need to compare CRV against Bitcoin looking at this chart CRV has already broken out of a multi-year downtrend and has now been retesting that breakout
as long as this breakout holds CRV objectively looks more attractive than even Bitcoin right now a move back to the November 2024 highs alone would mean a 100% outperformance by CRV relative to Bitcoin now even though many altcoins look attractive against both USD and Bitcoin not all of them will outperform Bitcoin even in a full-blown alt season and the reason for that is simply dilution you see back in 2017 there were only about 3,000 altcoins in existence but today that number has exploded to over 36 million altcoins and too many tokens means less liquidity per
project so we think that even as capital moves into altcoins high dilution could limit the number of altcoins that actually manage to outperform bitcoin this cycle that's why being selective this time around is going to be more important than ever
