What is Altcoin season? Why is Altcoin Season important and it is necessary to determine the time when Altcoin season is taking place to change positions and find profits.
BTC is approaching its all-time high price, is Altcoin Season really approaching? Let's find out about the terminology and the above topic with Trading Insight through the article below!
What is Altcoin season?
Altcoin season is a period of time when coins/tokens other than Bitcoin have strong and outstanding growth with "diverse growth amplitudes from a few dozen percent to several dozen times or hundreds of times growth" depending on the FOMO level of the market. This is also considered a golden time to help most small investors reap "huge profits" from the price explosion of the altcoins they hold.
Usually after BTC goes through a continuous price increase, creating a new ATH, then there is a significant price decrease. This is also when the market turns into Altcoin Season because the money flows from Bitcoin to Altcoin and increases the price regardless of any price fluctuations of BTC afterwards.
Why is Altcoin season important?
The volatility and price increase of Bitcoin is considered to be extremely profitable in the investment field. Especially Altcoin in the Crypto field can bring huge profits that can help assets increase several times, or dozens of times, even hundreds or thousands of times with Altcoin is really not difficult and it has actually happened. Therefore, recognizing that Altcoin Season is coming, can change the position of small investors. Bringing unimaginable profits to investors. Therefore, according to Trading Insight, Altcoin Season is very important.
Signs to Recognize and Determine When Altcoin Season is Coming
Bitcoin Dominance Is on a Decreasing Trend
Bitcoin Dominance is the percentage ratio between Bitcoin capitalization divided by the total cryptocurrency market capitalization. Bitcoin is the coin representing Crypto, leading the entire market growth, and the BTC Dominance index measures the influence of Bitcoin. To track where the current money flow is operating, if DOM is high, it means the market is attracted to BTC and vice versa. Therefore, we can use BTC Dominance in combination with other factors and track market capitalization to predict the development and direction of the Altcoin market in the short/medium term.
Market capitalization is volatile and tracking Total 2-3 indices are also increasing
If only Bitcoin Dominance index decreases but total market capitalization does not increase, this could be a “fake signal” for Altcoin Season. On the contrary, if Market Cap increases but Bitcoin Dominance index does not decrease, it is not considered Altcoin season.
In addition, it is necessary to monitor indexes such as Total 1, Total 2, Total 3 to determine more clearly.
Total 1 is an index that measures the total market capitalization of Crypto
Total 2 is an index that measures the total market capitalization of Crypto excluding Bitcoin.
Total 3 is an index that measures the total market capitalization of Crypto excluding Bitcoin and Ethereum.
We can rely on Total 2 to evaluate the growth of Altcoin and Ethereum. Total 3 is the leading capitalization of Altcoin representing Altcoin Season.
Keep an eye on indicators like Altcoin Season Index
This index is evaluated based on the top 50 coins with even capitalization value. If over 75% of coins show signs of good price increase, it will be assessed that the market is entering the Altcoin season. It is also an indicator with reference effect, so it is not decisive.
Altcoins are positioned for growth and it may actually be Altcoin season
According to Jafer, Bitcoin's rise could put altcoins in the crosshairs, as altcoin prices often react to the performance ofBitcoin“As Bitcoin accelerates, it could spark renewed interest in altcoins, especially those with unique technology or specific use cases,” he said. Jafer highlighted areas in the altcoin market that could benefit from this flood of attention and capital, including decentralized finance (DEFI), Layer 2, or blockchain gaming.
Key Market Drivers: Institutional and Regulatory Interests
Jafer points to two key factors influencing the cryptocurrency market: Growing institutional interest in Bitcoin and the changing regulatory landscape. Institutional investors are increasingly considering Bitcoin for their portfolios, a move that could stabilize the cryptocurrency and boost market confidence. “Institutional involvement could help sustain the price of Bitcoin, and combined with favorable regulatory developments, this could create a positive environment for altcoins,” Jafer explains.
Big Momentum as Bitcoin Approaches All-Time High
Excitement is building around a potential “altcoin season” across the crypto market. In a recent ETMarkets livestream, Anush Jafer, Head of Content at Mudrex Research, shared insights on how Bitcoin’s price movements could shape the broader crypto landscape and create opportunities for altcoins.
Jafer highlighted Bitcoin’s resilience during its climb to previous highs, a journey that has reignited discussions about its role as a market mover.
“When Bitcoin reaches these levels, the impact on the entire crypto market is significant,” Jafer noted, suggesting that Bitcoin’s strength often triggers a market-wide reaction. Historically, Bitcoin rallies have been followed by altcoin rallies, known as “altcoin seasons,” as alternative cryptocurrencies gain traction and attract new capital.
"Before participating in Altcoin Season, investors need to pay attention to carefully analyzing the market and not follow the crowd. Although the strong growth of altcoins during this period can bring attractive profits, it is also necessary to consider the risks, because the cryptocurrency market is still very volatile and unpredictable. Clearly define your investment goals, learn carefully about each coin, and only invest in altcoins with sustainable development potential."
Summary:
Based on the data provided by Trading Insight, I also hope to bring you more perspectives on Altcoin Season to better prepare your luggage and knowledge. Get ready for a new Altcoin season. Altcoin Season can help you earn a lot of profit, but it can also cause many investors to rush to the top. Therefore, prepare yourself with a comfortable and stable mentality. Equip yourself with knowledge and be ready. Hope for a long Altcoin Season. Trading Insight wishes you a successful investment.
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