Why does the prosperity of altcoins often lag behind the bull market and appear in the middle and late stages?

First, altcoin project teams are often short of resources, especially in the bear market and the early stage of the bull market. In order to maintain operations and team stability, they have to sell tokens regularly to cope with daily expenses, which limits their substantial growth in the early stage of the market.

Second, as the rise of mainstream cryptocurrencies such as Bitcoin (BTC) enters the middle and late stages of the bull market, large capital players have accumulated huge profits on mainstream coins and began to seek higher-risk, high-return investment opportunities. At this time, some hot money will turn to the altcoin market, pushing the price of altcoins soaring, forming the so-called "altcoin season". This period is both a carnival in the market and an opportunity for project parties and early investors to cash out and leave.

For the response strategy to this phenomenon, the following suggestions may provide some reference:

Flexible position allocation: adjust the asset portfolio according to market trends. In the early to mid-term of the bull market, you can maintain a high allocation ratio of BTC and mainstream public chain tokens (such as ETH, SOL, BNB), while appropriately allocating popular altcoins to capture potential growth. For example, before October 2024, you can configure 50% BTC, 30% mainstream public chain tokens, and 20% popular altcoins.

Adjust strategies with the market: As the bull market deepens, gradually increase the proportion of altcoins in order to obtain higher returns. However, it should be noted that when approaching the top of the market, you should appropriately reduce risk exposure and increase the configuration of stablecoins (such as USDT) so that you can respond flexibly when the market pulls back. For example, at the end of October, the configuration was adjusted to 30% BTC, 40% mainstream public chain tokens, and 30% popular altcoins; at the end of December, it was further adjusted to 30% USDT arbitrage, 30% mainstream public chain tokens, and 40% popular altcoins.

Be cautious in dealing with the end of the altcoin season: When the market enters the end of the altcoin season, it is expected that the price of altcoins will fluctuate significantly. At this time, you should significantly reduce your altcoin holdings and hold more stablecoins to avoid risks. For example, at the end of March 2025, you can adjust your positions to 90% USDT and 10% popular altcoins.

Clear positions at the right time: Once the market signals that the bull market is over, you should decisively clear your positions to secure your profits and avoid the uncertainty risks brought by long-term holding. Click me for details!#币安合约锦标赛