The Core Mechanics of Bull Markets: Why Altcoin Season Remains Essential

Conventional wisdom suggests that the ‘Shanzhai Season’ has concluded, but this narrative deserves scrutiny. According to this pessimistic script, 90% of altcoins would form stagnant sideways movements on monthly charts before plunging another 90% through extended bear markets, ultimately approaching worthlessness or facing delisting. The fortunate 10% might barely manage a 10x gain. Under this scenario, approximately 90% of all crypto projects would be entirely abandoned, and retail participants would likely abandon altcoins permanently.

But does this outcome actually align with how functioning market ecosystems operate? Consider the fundamental mechanics: a true bull market is characterized by the diffusion of profit effects across multiple assets, active sector rotation, and—critically—participation opportunities for newcomers. If a bull cycle only elevates select assets while the vast majority stagnate or decline, can it meaningfully be called a bull market at all? The distinction matters not for philosophical reasons, but because it determines whether market participants have incentives to return.

What Does Market Logic Actually Require?

Even under conservative estimates acknowledging declining crypto dividends, quality altcoins should deliver approximately 5x returns while lower-tier projects might achieve 2x gains. This baseline expectation isn’t arbitrary—it reflects the capital flows necessary to sustain ecosystem health. Without this level of volatility and distributed gains, the fundamental question becomes unavoidable: why should retail investors participate in subsequent cycles? More pressingly, why should they maintain conviction in altcoins as an asset class? How would market makers, exchanges, and development teams sustain themselves in a contracting market?

The Alternative Scenario

The only scenario that reconciles a weak altcoin market with current conditions is a deliberate liquidation event: major players extracting final value before abandoning the market entirely. If true, losses become acceptable as the cost of market termination. However, until empirical evidence suggests this endgame, market structure suggests capital remains perpetually active, and rotational cycles continue indefinitely. This isn’t optimism—it’s observation of historical market behavior. $BTC $ETH