5 Phases of Altcoin Season

Jakarta, Pintu News – Altcoin season (altseason) is a period when altcoin prices spike sharply as investors shift capital from Bitcoin (BTC) to more volatile assets. Generally, altseason occurs after Bitcoin’s price movement starts to slow down or stagnate, so traders look for profit opportunities in altcoins.

While it often follows the classic pattern of BTC → ETH → Large Cap → Small Cap, altseasons can also be triggered by specific narratives such as crypto AI, RWAs (Real World Assets), or new ecosystems that instantly attract capital flows to a particular sector without passing through all the stages sequentially.

1. Bitcoin dominance phase

The initial phase of the altseason is characterized by the dominance of the market by Bitcoin. At this stage, most of the capital flows into BTC as it is considered the most secure and liquid crypto asset.

Bitcoin’s (BTC.D) dominance is increasing, BTC trading volume is soaring, while altcoins tend to stagnate or even experience price declines.

Investor sentiment is in risk-off mode, preferring to keep capital in assets with lower risk. Usually, traders will wait for the moment of liquidity distribution from BTC before starting to enter altcoins.

2. Phase of the Move to Ethereum

As Bitcoin’s volatility began to decline and its price tended to stabilize, some funds from the market shifted to Ethereum (ETH). This shift is characterized by a rise in the ETH/BTC ratio, which suggests ETH is starting to outperform BTC.

Activity in the Ethereum ecosystem such as DeFi, staking, and Layer-2 protocols increased significantly, accompanied by an increase in TVL (Total Value Locked). Other triggering factors could be positive news or network upgrades that boost market confidence in ETH. This phase is an important transitional step before capital flows move more broadly to other altcoins.

Read also: Pantera Capital Survey: Salary Payments in Crypto to Increase 3x by 2024

3. Rally Phase of Large-Cap Altcoins

After Ethereum rallied, liquidity began to flow into large-cap altcoins such as Solana (SOL), Cardano (ADA), Avalanche (AVAX), and Polygon (MATIC). At this stage, the price increase of large-cap altcoins often reaches double digits in just a few days.

The TOTAL3 indicator (crypto market capitalization outside of BTC and ETH) usually starts to show a significant spike, which is a sign that capital has moved out of mainstream assets into altcoins. Big narratives such as AI, Gaming, or RWA further fuel market interest, and trading volumes on exchanges increase accordingly.

4. Medium & Small Capitalization Altcoin Phase

When large altcoins have experienced a strong rally, it is the turn of mid-cap and low-cap altcoins to rise, sometimes even surpassing the rise of large altcoins. At this stage, capital flows often go straight to specific narratives such as memecoins, crypto AI, or projects in new ecosystems.

Many altcoins experience simultaneous price increases, signaling the peak of market euphoria. Inflow and TVL data from analytics platforms such as DeFiLlama or Coinglass usually confirm large capital inflows into altcoins at this stage.

Also read: John Bollinger Warns of ‘Head Fake’ Amid Bitcoin Price Rebound, Here’s His Analysis!

5. Full Altseason Phase

The last stage is the peak of the altseason, where almost all altcoins, ranging from large to small capitalization, experience significant price increases. Market movements become very fast and tend to be parabolic, often independent of project fundamentals. Every sector, from DeFi, NFTs, GameFi, to memecoins, showed price spikes.

The market mood is euphoric, traders and investors are cautiously optimistic, and trading activity increases sharply. However, this phase is also the point where the risk of a major correction is higher, so experienced traders usually start taking profits to secure profits before the trend reverses.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• Mudrex. How to Approach Altcoin Season 2025 with a Strategy. Accessed August 9, 2025
• Featured Image: Generated by Ai