A reading below 25 means Bitcoin is outperforming most of the top 50 coins over the past 90 days. A reading above 75 means the opposite: altcoins are leading. That's the whole mechanic. The index is a ratio, not a forecast, and treating the number as a countdown to riches is where most people lose money.
How the index is actually calculated
CoinMarketCap publishes the Altcoin Season Index, and it's refreshingly simple underneath the branding. Take the top 50 coins by market cap, exclude stablecoins and wrapped assets, then check how many of them have beaten Bitcoin over the last 90 days. If 75 or more are winning, it's altcoin season. If 25 or fewer are winning, it's Bitcoin season.
Why 90 days matters
Three months is long enough to filter out a single green candle and short enough to catch a rotation while it's still happening. A one-week window would whipsaw constantly. A one-year window would tell you about last cycle's news.
What the index doesn't measure
It says nothing about whether those outperforming alts are good projects. A dying token that dropped 60% while Bitcoin dropped 65% counts as a "win." The index measures relative strength, not quality.
Reading the number in context, not in isolation
Newer traders tend to check the index once, see 78, and start buying everything with a ticker. That's backwards. The useful information is in the direction and the speed of the move.
Rising through 50
Crossing the midpoint usually means capital is rotating out of Bitcoin into larger alts first. Ethereum and other majors often lead. Small caps lag.
Falling back under 40
This is the part people ignore. A drop from 80 to 45 in two weeks often marks the tail end of a rotation, not the start of one. Late buyers get the worst fills.
Mini-scenario: Say you've got $4,000 sitting in a Kraken account in early spring. The index prints 81. You buy three small-cap alts at their local highs. Three weeks later the index sits at 38, Bitcoin has held its level, and your alts are down 30%. Nothing broke. You just bought the top of a rotation using a lagging indicator.
Where the index fits in a real process
It's a thermometer, not a prescription. Use it alongside things that tell you about liquidity and your own behavior.
- Bitcoin dominance — falling dominance plus a rising index confirms rotation. Rising dominance plus a rising index is a contradiction worth investigating.
- Stablecoin supply — growing stablecoin balances suggest dry powder waiting. Shrinking balances suggest capital leaving.
- Your own entry log — if the last five times you bought during an index above 70 you regretted it, that's data.
- Time horizon — the index is a 90-day measure. If you're holding for three years, it's nearly irrelevant to you.
Common misreadings that cost money
Treating 75 as a buy signal
By the time 75 coins out of 50 have beaten Bitcoin, the rotation is well underway. You're not early. You're mid-to-late.
Ignoring the composition of the top 50
The list changes. Coins enter and exit the top 50, which means the index isn't comparing the same basket month to month. A jump from 40 to 70 could partly reflect a reshuffled list rather than real capital movement.
Using it on a single exchange's data
Different platforms weight and select differently. If you're trading on Kraken, the index you see on a third-party site may not reflect the liquidity or pairs available to you there. Check what you can actually trade before acting on any reading.
Frequently asked questions
Is an altcoin season index reading above 75 a reliable buy signal?
No, and it's arguably closer to the opposite. A high reading means the rotation has already happened across most of the top 50. Historically, readings that spike and then fall back quickly tend to mark periods where late buyers got poor entries. Treat it as confirmation that a move occurred, not as a trigger to enter.
How often does the index update?
It recalculates daily based on rolling 90-day performance, so the number you saw yesterday may differ today even if nothing dramatic happened. Small daily moves are noise. What matters is the trend over one to two weeks and whether it's accelerating or flattening.
Should I ignore the index if I only hold Bitcoin?
Mostly, yes, though it's still useful context. A very low reading tells you Bitcoin is dominating, which can be reassuring if you're holding through a rough alt period. It won't change your strategy, but it explains why your alt-holding friends are complaining.
Does a low reading mean altcoins are cheap?
Not necessarily. A reading of 20 means Bitcoin outperformed, which can happen because Bitcoin rose or because alts fell harder. Those are very different situations. Pair the index with price charts before drawing any conclusion about value.
Next time you check the index, write down the number and the date before you do anything else. Then wait a week and look again.