Altcoin season is the period when coins/tokens other than Bitcoin experience growth that far exceeds that of $BTC, with increases from several hundred to several thousand percent in a short time, as the FOMO level of the entire crypto market reaches its peak.
This is the period that retail investors anticipate the most, as it allows them to increase their assets at an incredible speed by holding altcoins.
The flow of money in financial markets always follows the principle from large-cap assets to smaller assets. In the crypto market, this order is 'BTC -> ETH -> Major Altcoin (or Altcoin Large Cap) -> Altcoin season.
Signs that can help people predict when Altcoin Season begins:
1. Bitcoin is the leading symbol driving the entire market's growth, and the BTCD (Bitcoin Dominance) index measures Bitcoin's dominance. If BTC.D rises sharply, it means that the flow of money is still prioritizing investment in BTC.
2. Altcoin season will kick off after BTC shows signs of slowing down after a long uptrend, going sideways within a range, and large-cap altcoins begin to outperform, especially Ethereum; 75% of the top 50 altcoins start to outperform BTC (meaning 33/50 large-cap altcoins must have a higher growth rate than BTC) -> This is when BTC.D starts to peak and decline, which is when altcoin season explodes.
3. Total 1-2-3 Index: Closely monitor the 3 indices Total 1, Total 2, Total 3 to help you predict altcoin season:
- Total 1 is an index measuring the total market capitalization of Crypto.
- Total 2 is an index measuring the total market capitalization of Crypto excluding Bitcoin.
- Total 3 is an index measuring the total market capitalization of Crypto excluding Bitcoin and Ethereum.
Altcoin season is strongest when Total 2 surpasses Total 3.
4. You can rely on some reliable indicators like the altcoin season index; every time this index exceeds the 75 range, altcoin season will come. Currently, this index is at 71, and the great thing is that BTC.D is still holding at a high level. As long as BTC.D falls back to around <40%, we will witness altcoins experiencing increases of 50-100%.
5. Another tip to predict altcoin season is when CEX exchanges, especially Binance, start listing projects with higher frequency, continuously using launchpool/launchpad. This also indicates that the development teams of the projects are timing the upcoming market explosion.
However, the altcoin season is not necessarily all rosy, and everyone will profit. In the last two uptrend seasons, during Bitcoin's price increase from $3K to $60K, most profits belonged to super whales with assets ranging from tens of millions to billions of USD, while most retail investors still suffered losses.
The rapid pump/dump of too many altcoins with small to very small capitalizations has caused retail investors to become 'seasick' and not able to exit the market in time. One person's joy will be another's sorrow when they are caught at the peak for not understanding the nature of altcoin season.
Simply put, Altcoin Season is a period that easily generates profits, even for those who do not have much experience in the market. In the short term, if Bitcoin maintains its growth or stabilizes around record highs, the likelihood of an altcoin season is very high. Altcoins with solid technological foundations, strong communities, and real applications will be more worthwhile investments than those that rise quickly and then drop quickly.
However, thorough research is still the top priority for you to make a profit. Don't rush into FOMO chasing short-term trends. Wishing you abundant harvests with the upcoming Altcoin Season.
