While many evaluations and technical analysis about the price of Bitcoin (BTC) are common, the overwhelming majority of investors are wondering which direction altcoin prices will go.
According to the research of popular social trading platform eToro, investors who knew well when to convert their Bitcoins into altcoins increased their earnings significantly in 2020. The main thing here is to determine when the stranded sub season will begin.
In its quarterly report, eToro shared data on the 2020 bull market, citing the cycle where altcoins rose against the dollar and likely outperformed Bitcoin.
The research found that the top 100 altcoins were “a more profitable investment vehicle” than BTC for most of 2020. On the other hand, investors who knew when to switch from BTC to altcoins almost doubled their earnings during the year.
EToro gave the following statement:
“ If you started with Bitcoin, it was possible to make more than 7 times the revenue by taking advantage of the 3 and 4 times the earnings seen by both investment instruments by trading only twice during the whole year (moving from Bitcoin to altcoin in May and back to Bitcoin in September). . “
Although EToro experts admit that predicting the altcoin and BTC season is very difficult, they also point to a variety of data that can help it determine market cycles.
It points to statistics that will reveal the popularity of altcoins, such as relative transaction volume, social media activity, the number of news published about newly listed cryptocurrencies and crypto money projects.
If only the transaction volumes are evaluated, a classic chicken and egg situation is encountered. Because it is not always clear whether the transaction volume increases organically or simply because the price is rising.
As regards social media activity, eToro uses data from crypto analytics firm The TIE to compare altcoin tweet volume to Bitcoin.
The report states that “when the sub-season begins, it can be defined by the relative number of tweets about altcoins”:
“This data seems to point not only to changes in May and October, but potentially to a short-term sub season at the end of February.”
Dogecoin (DOGE), which was developed on internet jokes, has recently attracted the attention of social media. DOGE was the first altcoin to surpass Bitcoin in terms of daily trading volume over the past week, according to The TIE data.
Regarding the listing on the stock exchanges, eToro, again using TIE data, announced that a “net increase in the number of listings” was seen in late summer 2020. During the same period, altcoins surpassed BTC in terms of performance.
The sudden increases in the news published directly by cryptocurrency companies also seem to point to the lower season. EToro states that “it makes an intuitive sense” as these articles are often about project updates and other major announcements.