What is Altcoin Season and How to Make the Most of It?

July 20, 2022
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Altcoin season or altseason is a period in which alternative crypto coins experience an increase in market performance due to increased prices and trading volumes. Altcoin or alternative coin is a term used when referring to crypto assets other than Bitcoin such as Cardano, Polkadot, Polygon, Ethereum, etc. This term is used to distinguish Bitcoin from other crypto assets due to the market capitalization of Bitcoin which controls almost 50% of the world crypto market.

The trend or ‚ÄėSeason‚Äô of altcoins is one of the cycles that occur in the cryptocurrency market. In addition, there is also Bitcoin season which is a period when Bitcoin dominates the crypto market.

These two season terms are used in periods of bull run or conditions when the crypto market experiences an increase in price and performance. Usually, these so-called ‚Äėseasons‚Äô interchange with each other as price increases will not last for a long term.

What causes an Altseason to happen?

After a fairly high price increase, the price of Bitcoin will tend to become more stable. As a result, investors will seek more profitable investment opportunities. They will start to sell their Bitcoin for Ethereum and other potential altcoins. This trickling of investment eventually triggered Altseason, which sent the overall Bitcoin market down and gave rise to the alternative coin’s market.

Why is this cycle important?

Understanding the current cryptocurrency season can provide many opportunities for you to choose the right crypto asset. This season can be an important signal of which cryptocurrencies will increase in price and which will decline or stagnate. This cyclical trend can help you determine which assets you can buy low and sell high for a profit.

Also read: Fear and Greed index, crypto market sentiment indicator

For example, in Bitcoin season, the price of altcoins will generally be at a stable level or even decline. In this condition, you can start researching to buy some altcoins that are experiencing a decline in price or a dip. This phase can be an opportunity for you to get altcoins that have great potential in the long term or even in the medium term where they will peak in altseason.

Altcoin season and the process behind it.
Altcoin season process. Source: Nicolas Matusiak Medium.

In altcoin season, you can start selling some of your crypto assets that are experiencing price increases. You can also hold (HODL) to wait whether the price increase in this altcoin season will become the new support level (normal price) for the coin. Holding a coin during altseason means you will be fully invested in the coin for a longer-term.

In the end, altcoin season provides a lot of opportunities for you to take advantage of the rising market of alternative coins with great potential. This season is also usually an important momentum for many new projects in the DeFi industry to get the attention of the crypto community.

How to know when the altcoin season has started?

Altcoin season is simply a period when more investment flows into altcoins than Bitcoin. This can happen for several reasons. One of them, Bitcoin just finished its dominance in the market after going through a significant rise and investors started selling their Bitcoin assets for profit. At the same time, the performance of several other altcoins is starting to look better with increased trading volume and cash flow. At that moment, we can see that the altseason is about to begin.

Altcoin season index created by blockchain center.
Altcoin season index from Blockchain center

Apart from watching the market and seeing analysis from the crypto community, there is an intuitive site that can help you determine whether altseason has started. The Blockchain Center site has a page containing the altcoin season index which can make it easier for you to see if the altcoin season has occurred. The Blockchain Center site also has an index of altcoin month and altcoin year which display the situation of altcoin dominance in this month and year. In addition, the page also provides statistics on the performance of several assets.

Lastly, the movement of market capitalization from Bitcoin to altcoins can also be seen in the news and trends that occur in the crypto community. News about the planned development of several altcoins launched close together can be a signal of an upcoming altcoin season. Announcements about large investors investing in altcoins usually also indicate the trend in which money moves. In addition, altseason usually starts with particular altcoins gaining significant popularity such as Shiba Inu (SHIB) or an industry within altcoin that suddenly increased in popularity such as NFT.

How can you take advantage of the altseason cycle in cryptocurrencies?

Buying altcoin assets as investment

The altcoin season can be an opportunity for you to own several altcoins with great potential in the medium and long term. As already explained, this season opens up a lot of potential for cryptocurrencies with a promising future. The most important thing you can do is to research and analyze altcoins before altseason. This can help you buy the correct asset before entering altseason so that you can benefit from the price increase.

Also read: Several methods in analyzing crypto assets

You also need to consider that while altcoins provide a lot of potential for profit, they also carry a higher risk than Bitcoin. Cases of altcoins that lose their value in a short time have happened several times, especially in cases of altcoins that suddenly experienced a drastic increase in popularity such as Dogecoin and Shiba Inu. Therefore, you need to do quite deep research on the altcoins before buying.

In addition, altcoins provide the potential to diversify your portfolio of crypto assets. This diversification strategy is very important to do because the volatility of the crypto market means you can suddenly lose your money especially if you focus all your investments on one crypto asset. If you choose the right assets, this diversification can also bring benefits in the long term.

Trading for profit

The second strategy in utilizing altcoin season is to trade. In this season, many altcoins experience drastic price increase and if you are willing to take the risk, you can benefit. However, it depends on your analysis and research on altcoins especially looking at important attributes such as trading volume, the community’s trust in altcoins, and their popularity.

Also read: What’s the difference between active and passive trading?

In addition, there are great potentials in the many altcoin projects that are launched this season. When looking for profit, you can look for altcoins that have a strong development team, a product with clear utility, and a loyal community that continues to grow.

How to buy altcoins?

You can start investing in various types of altcoins in the Pintu application. Through Pintu, you can buy altcoins such as ADA and other crypto assets in an all-in-one convenient application.

Pintu is also compatible with popular wallets such as Metamask to facilitate your transactions. Download the Pintu app on Play Store and App Store! Your security is guaranteed because Pintu is regulated and supervised by Bappebti and Kominfo.

Conclusion

Altcoin season is one of the seasons in cryptocurrencies market cycles. It is an important time where altcoins asset demonstrate their performance and superiority over Bitcoin. For traders, this season is an important opportunity to diversify their asset portfolio and gain profits from altcoins with a promising future. However, traders need to be careful in picking their altcoins because they also carry a greater risk than investing in Bitcoin.

Sources:

  1. Alt winds of change ‚Äď Coin Telegraph
  2. What is an alt season? ‚Äď Escape Artist
  3. Exploring altcoin season ‚Äď Moralis Academy
  4. What is an Altseason ‚Äď Bitcourier

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Ari Budi Santosa
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Ari Budi Santosa

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