What's the altcoin scheme?
With each new cycle, the interest in Bitcoin is growing. When the Bitcoin cycle ends and the price begins to decrease, most beginners leave the market, and the traffic at the exchanges decreases.
The picture shows the price dynamics of the main coins (LTC, ETH, EOS, ZEC, etc.) to Bitcoin. Look from top to bottom. The chart is growing - it's a fall of the alts, the chart falls sharply down - it's an alt's season.
The slippage in the purple rectangles is the alt's season in the second and fourth quarters of 2017. This is followed by a downtrend period, which is highlighted in red. The good news is that we haven't seen a full-fledged alt-season on the current Bitcoin bull run. The small price hikes that have been taking place this year are a rehearsal.
What makes me so sure? I will explain in detail tomorrow in a separate post. In the meantime, pay attention to how, starting from 2017, altcoins began to move in exactly the same way, as if it were a single index.
The growth of Bitcoin inevitably attracts the attention of random people. With each new cycle, this attention grows. More attention means -> more newcomers to the stock exchanges. Exchange owners themselves know this very well and track the growth of traffic on their markets. As soon as the inflow of fresh blood reaches the desired point, the long-awaited alt's season begins.
Alt's season is beneficial to everyone except beginners. Exchanges sell their coin stocks at inflated prices because inexperienced players are ready to buy these wrappers even for x10. Developers also get richer, because a significant part of the circulation of any coin is in the hands of the team. All this banquet is paid for by beginners from their pockets.
Thus, the growth of Bitcoin leads to pampas alto. The more the hippie is accelerated, the more likely the alt season is. When the Bitcoin cycle ends and the price begins to fall, most beginners leave the market, and the traffic at the exchanges decreases. It is not profitable for exchanges to arrange mass pumping anymore, as the number of stupid buyers has become much smaller. Alts move into the phase of a prolonged decline, where they will be accumulated for a long time by whales or exchanges themselves, to prepare for new growth of Bitcoin and alt's season in a few years.