Many experienced cryptocurrency fans dream of successfully entering the altcoin season. Beginners usually do not know what it is, why it is so expected and loved, and how to determine its beginning.
What is altcoin season?
Market cycles consist of alternating booms and busts. Altcoin season or altseason is a phenomenon specific to the cryptocurrency market. The general term altcoins refers to all cryptocurrencies except Bitcoin. Accordingly, altcoin season is the period of the cycle when these assets begin to grow rapidly. It is often preceded by a sharp increase in the BTC to USDT exchange rate.
During this period, many of them become more expensive by several times or orders of magnitude, their cost reaches local or historical maximums. An upseason could be caused by a variety of factors, including changes in investment sentiment, new technological developments, or a shift in investor interests.
The most striking examples of alt-seasons: from December 2017 to January 2018 and autumn 2021.
This is truly a golden time for traders and investors, a period when it is quite possible to quickly increase your deposit by several times, hundreds or even thousands of times. However, despite the potential for high returns, many market participants succumb to emotions such as FOMO (fear of missing out) and risk missing out on taking profits. After the end of the alt-season, many of its stars are subject to sharp drops in value, and those who did not manage to take profits suffer losses.
In such a situation, it is important to avoid impulsive decisions and mentally prepare for the end of the altseason in advance. During this time, it is especially important to maintain a level head, discipline, and strategic planning to cope with volatility and emotional challenges. Even if you personally are not very lucky at the moment, the boring HODL strategy can come to the rescue. It will help you take a wait-and-see approach and better prepare for the next rally. You will have time to deeply study the market and convert LTC to XRP at the most favorable rate.
When does the altseason start and how long does it last?
Determining the onset of altcoin season is quite difficult. When Ethereum (ETH) and other coins begin to show price dynamics, noticeably ahead of Bitcoin and the dollar, it is most likely already in full swing. The following are usually considered harbingers of the altseason:
Dynamics of price changes of leading altcoins. Watch the price changes of Ethereum and assets from the TOP 10. The rise in prices of these coins may be a harbinger of altseason activity.
Changing Bitcoin dominance. The impending growth of altcoins is often indicated by the decrease in BTC’s dominance in the market.
Comparison of capitalization. If the growth rate of the total capitalization of altcoins begins to outpace the growth of the total capitalization of the crypto market, including Bitcoin, this may indicate the approaching altseason.
AltSeason Index. Some analytics tools offer the AltSeason Index, which measures the relative activity of altcoins in the market.
However, the cryptocurrency market is not very predictable, and even completely unambiguous indicators for each of the criteria do not yet guarantee the onset of the altseason. And even more so, they do not indicate in any way its possible duration, which extremely rarely exceeds a month and a half.
What is AltSeason Index and where to find it
Altcoin Season Index is an indicator that signals the beginning of the altseason in the cryptocurrency market. To calculate it, the growth rates of the total capitalization of the 50 largest cryptocurrencies and Bitcoin over 90 days are used. If Bitcoin grows slower, hello, new altseason. It is worth considering that when calculating the index, all stablecoins and wrapped assets are excluded from the TOP-50.
You can use various sources and resources to view this index:
- Financial news portals. Many financial news portals and cryptocurrency platforms provide indices and analytics on the state of the market.
- Cryptocurrency analytical resources. Information on the state of the altseason and the AltSeason Index can be provided by specialized analytical resources, such as CoinMarketCap, CoinGecko, Messari and others.
- Trading platforms. Many large cryptocurrency exchanges also provide their own analytics.
- And of course, active discussion of the market situation takes place on social networks and specialized forums.
It is almost impossible to fully prepare for altcoin season. It begins suddenly and can end in just one or two weeks or last several months. The main thing is to have time to sell coins on time, take profits and stock up on fiat money or stablecoins before the next altseason or to buy Bitcoin.