Altcoin Season is the phase when the market shifts attention from Bitcoin to Altcoins, where Altcoins often experience superior growth compared to Bitcoin. This is a great time to optimize profits, but it also comes with significant risks. This article will guide you on how to select Altcoins and build an investment strategy during Altcoin Season.
1. What is Altcoin Season?
• Altcoin Season occurs when the majority of Altcoins (both large and small cap) experience stronger growth than Bitcoin over a short period.
• Signs to recognize:
• BTC Dominance ratio decreases (below 40%).
• The Altcoin Season Index (from Blockchain Center) is increasing.
• Altcoins that have yielded superior profits compared to Bitcoin over the past 90 days.
2. Which Altcoins to choose?
2.1. Large-cap Altcoins
• Goal: Safe, stable investment, high liquidity.
• For example:
• Ethereum (ETH): The most popular smart contract platform.
• Binance Coin (BNB): Support in the Binance ecosystem.
• Cardano (ADA): Optimized blockchain for smart contracts.
• Solana (SOL): High-performance blockchain, low transaction fees.
2.2. Medium-cap Altcoins
• Goal: High growth, lower risk than small-cap Altcoins.
• For example:
• Polygon (MATIC): Layer-2 for Ethereum.
• Avalanche (AVAX): Multifunctional blockchain with Ethereum compatibility.
• Chainlink (LINK): Provides data for smart contracts.
2.3. Small-cap Altcoins
• Goal: High profit, high risk.
• For example:
• Render Token (RNDR): Supports distributed graphic rendering.
• Gala (GALA): Token for blockchain gaming.
• Illuvium (ILV): Metaverse and NFT platform.
2.4. Trend Altcoins
• Goal: Capture new trends.
• For example:
• DeFi: Aave (AAVE), Curve (CRV).
• Metaverse/NFT: Decentraland (MANA), Sandbox (SAND).
• Layer 2 Scaling: Optimism (OP), Arbitrum (ARB).
3. Steps to analyze before buying Altcoin
3.1. Fundamental Analysis
1. What is the project's goal?
• Read the Whitepaper.
• Check solutions and practical applications.
2. Development team and investors:
• Is the team reputable?
• Does the project receive support from large funds?
3. Community and development:
• Does the project have a strong and active community?
• Activity of the team on GitHub, Telegram, Twitter?
3.2. Technical Analysis
1. RSI Index:
• If RSI < 30, the Altcoin is in an oversold state (buying opportunity).
• If RSI > 70, the Altcoin is overbought (exercise caution).
2. Trading volume:
• Consider the level of market interest.
• Sudden spikes in volume can signal a price surge.
3. MACD:
• Identify the upward or downward trend.
3.3. Market information
• Monitor major events such as partnerships, product launches, or network upgrades.
• Use platforms like:
• CoinMarketCap or CoinGecko: Monitor market cap and rankings.
• Glassnode: On-chain data analysis.
4. Investment strategies in Altcoin Season
4.1. Capital allocation
• 60%: Large-cap Altcoins (ETH, BNB, ADA, SOL).
• 30%: Medium-cap Altcoins (MATIC, AVAX, LINK).
• 10%: Small-cap Altcoins or trends (RNDR, GALA, MANA).
4.2. Risk management
1. Stop-loss:
• Set stop-loss levels from 10% to 20% to protect capital.
2. Take profit:
• Take profit when reaching a profit of 50%, 100%, or at each growth milestone.
3. Reallocate capital:
• Once profit is taken, convert a portion into stablecoins (USDT, USDC) or Bitcoin.
4.3. Continuously monitor the market
• The Altcoin market can reverse quickly.
• Use price alert tools to monitor.
5. Useful tools
1. Binance API or TradingView:
• Integrate data to monitor Altcoin prices.
2. Analysis platform:
• Glassnode: On-chain analysis.
• Santiment: Market sentiment analysis.
3. Price alerts via Telegram:
• Create a bot to receive price alerts when Altcoin reaches the desired threshold.
6. Important notes
• No FOMO (Fear of Missing Out): Don't buy just because the price is rising sharply.
• Only invest money you can afford to lose.
• Always update information: Follow the news and adjust strategies if the market changes.
If you need a more detailed list of Altcoins or want to integrate trading support tools, let me know!