Altseason Index

Description of the "Altseason Index" Indicator
The Altseason Index is a powerful and visually minimalist tool designed to objectively identify the onset and conclusion of an "altseason" in the cryptocurrency market. Moving beyond subjective speculation, this indicator employs a clear, mathematical methodology by comparing the performance of a broad basket of altcoins against Bitcoin.

🎯 Core Concept and Utility
An "Altseason" is a market period where altcoins (cryptocurrencies other than Bitcoin) consistently yield higher returns than BTC. This indicator empowers traders and investors to:

Objectively Identify Market Cycles: Precisely pinpoint when capital is actively rotating from Bitcoin into altcoins and vice versa.

Make Data-Driven Decisions: Adjust their strategy in a timely manner: increasing exposure to altcoins during an altseason or rotating back into BTC upon its conclusion.

Avoid Emotional Pitfalls: Steer clear of FOMO (Fear Of Missing Out) and base decisions on hard data rather than market noise.


⚙️ How the Calculation Works
1. Asset Selection: The indicator tracks the performance of 15 leading altcoins across various market segments (Layer 1s, DeFi, Meme, Payments), ensuring a representative sample.

2. Performance Comparison: For each altcoin, the percentage price change over the user-defined lookback period (default: 90 days) is calculated. This performance is then compared to BTC's performance over the same period.

3. Counting the "Outperformers": The index counts the number of altcoins that have "outperformed" BTC.

4. Calculating the Index: The Altseason Index value is the percentage of altcoins in the basket that are outperforming BTC. For example, a value of 60% means that 9 out of the 15 coins performed better than Bitcoin.


🛠️ Indicator Settings
The settings are kept simple and intuitive, allowing you to customize the indicator to your strategy:

Lookback Period (days) (Default: 90):

- Defines the time horizon for the performance calculation.

- Shorter Periods (30-60 days) react faster to new trends but may produce more false signals.

- Longer Periods (90-180 days) provide smoother and more reliable signals, capturing sustained macro-trends.

Altseason Threshold (%) (Default: 75%):

- This is the key parameter that defines what index value constitutes an official "altseason."

- A threshold of 75% means an altseason is declared when at least 11 out of the 15 altcoins (75%) are outperforming BTC.

- You can increase the threshold (e.g., to 85%) for more conservative and stronger signals, or decrease it (e.g., to 65%) for earlier entries.


📊 Interpreting the Readings and Signals
The indicator uses a clear color-coding system and levels for easy interpretation:

🔴 < 30%: "BTC SEASON"

Bitcoin is dominating. The market is in risk-off mode or a state of anticipation. Growth is concentrated in BTC.

⚪ 30% - 49%: "NEUTRAL"

A transitional phase. The market is uncertain. Some alts show strength, but there is no unified trend.

🔵 50% - 74%: "BULLISH"

Growing strength in altcoins. Capital is beginning to rotate actively. This can be an early stage of an altseason.

🟢 ≥ 75% (or your custom threshold): "ALTSEASON"

The active altseason phase. The vast majority of altcoins are rising faster than BTC. This is the period of maximum potential returns for alts.

Signal Markers:

Green Dot: Signals the potential start of an altseason (the index crosses above the threshold).

Red Dot: Signals the potential end of an altseason (the index crosses below the threshold).



ℹ️ Information Panel
The chart displays two clean information panels:

1. Main Info Label:

Current index value (e.g., ⟠ 80%).

Market status (ALTSEASON, BULLISH, etc.).

The ratio of outperforming altcoins (11/15 alts).

2. Dominance & Market Cap Panel:

Alts: Altcoin Dominance (the market cap share of all coins except BTC).

BTC: Bitcoin Dominance.

Market: Total cryptocurrency market capitalization in billions of USD. This helps assess the overall market context (bullish/bearish).



💎 Conclusion
The Altseason Index is your strategic companion for navigating the crypto markets. It transforms the complex task of identifying market cycles into a simple and visual process. Use it to confirm broad market trends, identify potential entry and exit points, and, most importantly, to maintain discipline in your trading strategy by filtering out noise and emotion.

Disclaimer: This indicator is a tool for analysis and does not constitute investment advice. All trading decisions are taken at your own risk.