If you are familiar with a concept called Bitcoin dominance, you can easily understand the concept of Altseason. In fact, the Altseason or Altparty , or in other words, the season of Altcoins, is when bitcoin’s dominance declines sharply. And in practice, assests flow from bitcoins to Altcoins, which makes Altcoins grow very well at that time.
If we examine this issue through Market-Cap, it has a very simple meaning.
As a rule, when bitcoin as the first cryptocurrency in the market experiences price growth, it is natural that Investors are drawn to BTC, not Altcoins, and practically, if new asset is going to enter the market, it will primarily enter Bitcoin, not Altcoins. So it’s natural that at a time when bitcoin’s dominance is increasing,
slowly withdraw some of the funds on the Altcoins and move to the bitcoin itself. Now, the smaller that Altcoin market cap, the more asset that comes out of it, which can cause sharp price drops for that currency.
For example, an Altcoin on which the asset is tens of millions or hundreds of millions dollars. It is natural that if 50% or 60% of this market cap comes out and goes to bitcoin, there will be a 50/60% drop for that Altcoin. But practically, when such an asset goes to Bitcoin, given the billion-dollar BTC market cap, such a multimillion-dollar asset can not affect its price. But on the other hand, when Bitcoin reaches its price peaks and traders and investors can make enough profits from it, slowly the assets flow out of the bitcoins and goes to the Altcoins.
This makes, given the billion-dollar investment in bitcoin, when a certain amount of this asset goes to a small Altcoin, this leads to several hundredfold growth over coin.