#BTCOutlook The crypto space consists of various markets: NFTs, stablecoins, memes, and altcoins, which is one of the largest. It is led by Ethereum and directly depends on the behavior of Bitcoin. The period when altcoins move upwards is known as altseason.
WHAT IS AN ALTCOIN?
Although there are specific categories that separate memes or stablecoins and other types of tokens, everything that is not Bitcoin can be considered an altcoin. Altseason (altcoin season) is referred to when the price of these assets skyrockets, showing sustained performance superior to BTC.
WHERE TO BUY ALTCOINS?
Preparing for an altseason involves accumulating altcoins before the price rises. Centralized exchanges (CEX) have a multitude of altcoins with potential, but some are only available on decentralized platforms. Depending on your strategy and prior research, you can choose a more or less risky option.
UNDERSTANDING THE BULLISH CYCLES OF THE MARKET
To understand altseasons, it is necessary to study the cyclical nature of markets, including the crypto market. In short, they move between bullish and bearish phases that respond to various factors, both general or macroeconomic and specific.
During a bull market, prices tend to rise smoothly. In the case of altseasons, it is a favorable environment for traders looking for opportunities to maximize profits by diversifying their crypto portfolio. Money flows out of Bitcoin to other cryptocurrencies, something that usually annoys bitcoiners, although it benefits the market due to the increase in trading volume.
HOW TO IDENTIFY AN ALTSEASON
Identifying an altseason is crucial to take advantage of its benefits in trading. It is not always easy, although there are some indicators that can be very helpful, such as market capitalization and dominance.
This loss of capitalization of Bitcoin during altseasons is reflected in its dominance. In fact, it is one of the variables observed when assessing the state of an altcoin season. The ratio of Bitcoin dominance and that of altcoins tends to balance out, as total capitalization generally increases, but Bitcoin's increases at a lower rate compared to the rest of the market.
If a price increase is observed, but Bitcoin's dominance remains relatively high, we cannot speak of the beginning of an altseason. A significant influx of capital from Nakamoto's network towards other alternative projects (including memes and stablecoins) is a fundamental requirement to define an altseason.
Tracking the market capitalization of altcoins is important to assess the state of the market regarding the possible onset of an altseason. An increase in the dominance of major altcoins (for example, $ETH , $SOL, $XRP, $ADA, or $DOGE) may indicate a decline in investor interest in Bitcoin.
