The copycat season did not come because the Fed did not release money?

In-depth interpretation: The arrival of the copycat season does not rely entirely on quantitative easing policies

Recently, the views on "no QE, no copycat season" have become rampant. This article will explore this conclusion in depth and combine chart analysis to reveal the real driving factors of the copycat season. (Author: Shenchao TechFlow)

1. A brief review of QE and QT

Quantitative easing (QE) policy, where the central bank injects market liquidity through the purchase of assets, usually favors risky assets, such as cryptocurrencies. Quantitative tightening (QT) policies, on the contrary, central banks reduce money supply, which is often detrimental to risky assets.

2. Chart analysis: QE is not a necessary condition for the copycat season

Overlay the total market value of altcoin with the Bitcoin dominance chart and mark the QE and QT periods, we found that even in the QT period, the altcoin market experienced significant growth, which directly refuted the assertion that "no QE, no copy season". The bull market in 2021 is the only case where QE and bull market overlap. Other factors, such as ETF launches, government policies, stablecoin reserve mechanisms (SBRs), or rising Bitcoin value, may also trigger market growth.

3. Periodicity of Bitcoin Season and Copy Season

The crypto market is usually divided into two stages: Bitcoin season and copycat season:

• Bitcoin quarter: Bitcoin dominance has increased, funds flow to Bitcoin, and altcoins have performed relatively weakly.
• Copycat Season: Bitcoin dominance declines, funds flow into altcoins, and the total market value of altcoins grows rapidly.

Historical data shows that most of the time is in the Bitcoin season. The copycat season usually happens after Bitcoin breaks through a new high and enters a consolidation period and truly arrives when Bitcoin rises again.

4. Triggering mechanism of copycat season: capital flow and market sentiment

The start of the copycat season is usually triggered by a bull market in Bitcoin, but this does not depend on QE. The path of capital flow is clear: Bitcoin → Major altcoins → High market capitalization tokens → Medium market capitalization tokens → Low market capitalization tokens. Media speculation and investors' pursuit of higher returns will further promote capital flow into the altcoin market. This phenomenon usually occurs during the second breakthrough of Bitcoin.

5. Conclusion

QE can promote market growth, but is not the decisive factor in the copycat season. The arrival of the copycat season depends more on the cyclical rise in Bitcoin, market sentiment and the gradual inflow of funds. The market has grown from $700 billion to nearly $4 trillion, which shows that we are moving towards the direction of copycat season, which has nothing to do with QE/QT policies.

(Disclaimer: This article is for reference only and does not constitute investment advice. Cryptocurrency investment risks are extremely high, please make cautious decisions.)

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