As the cryptocurrency market develops, it becomes more and more similar to traditional markets but still retains its own specific features. One such feature is the existence of the so-called altcoin season, also known as altseason. This is the name given to the short period of time when altcoins surpass the multi-year flagship in terms of growth. This is a great time to make money, but to realize this opportunity, you need to at least be able to recognize the onset of the alt season.
What is altcoin season?
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This phenomenon is closely related to market cycles in which bullish and bearish trends alternate. When buyers dominate the market, a bullish trend is formed. Market participants are counting on an increase in asset prices. When buyers reach their goals and begin to take profits en masse, prices begin to decline and sellers seize the initiative. At this time, it is important to have time to sell the coins before they become too cheap.
While buyers dominate the market, BTS rises in price and other assets join the general trend following it. Seizing the moment, investors redistribute funds in order to diversify and increase profitability. Due to the increasing inflow of capital, coins with low and medium capitalization begin to grow rapidly, adding tens and hundreds of percent in price. At this time, there is a chance to sell ETH to XMR especially profitably.
What factors influence its onset
It is extremely rare to clearly identify the reasons for the occurrence of a particular event in the crypto market. In fact, the causes and markers of market processes are too closely intertwined. However, consider the main indicators that may indicate the beginning of the altcoin season.
This metric shows the ratio of BTC capitalization to total market capitalization. As investors begin to reallocate capital, BTS’s market share is declining.
The temptation to make quick profits in a rising market is very high and many traders are turning their attention to alternative digital assets. A fairly typical phenomenon for such a period is the influx of newcomers who cannot afford Bitcoin, and many of them are looking specifically at altcoins.
The mathematical expression of market sentiment is nothing more than an index of fear and greed. It is calculated based on many variables, including trading volume, volatility, survey results, and social media activity, and ultimately gives the most objective assessment of the current situation.
An increase in the greed indicator indicates a growing trend during which investors become more risk-averse. Many are investing in relatively obscure assets in an effort to earn higher returns and thereby influence the ratio.
News & Events
The cryptocurrency market is very sensitive to news. New partnerships, announcements, technological advances, changes in legislation – each of these events can hasten or delay the onset of the alt season. They usually draw attention to specific segments or individual assets. For example, the 2020 and 2021 DeFi altcoin season became possible amid a surge in interest in decentralized finance protocols.
Altseason triggers can be blockchain upgrades or innovative features. Such events also work pointwise, stimulating investor interest in specific assets or segments.
How not to miss the start of the alt season
The most difficult task for a trader is to correctly enter and exit the market. Recognizing the alt season in time is, if not half the success, then at least 40%.
This indicator is calculated based on the market characteristics of the best altcoins. The signal for the start of the alt season is considered to be an increase in the index to 75+%. A drop below 25% means that Bitcoin is reigning in the market again.
The dynamics of market capitalization can also be a reference point. A possible shift in investor interest away from BTS may be indicated by an influx of capital into popular assets like ETH, SOL, XRP, etc.
Where to buy coins
Active price movements in the market are a traditional time for large purchases and sales. The choice of platforms where you can exchange any coin as quickly as possible in any direction among centralized cryptocurrency exchanges is generally not very rich. In such cases, the service comes to the rescue. Here you can quickly and anonymously exchange ETH to FTM or any other of 2500+ coins without any restrictions. The service is extremely easy to use and available without registering an account.