Altcoin Season refers to a phase in the cryptocurrency market where altcoins — any cryptocurrency that is not Bitcoin — experience a significant price surge, often outperforming Bitcoin. This period is characterized by heightened investor interest and a surge in the trading volume of alternative cryptocurrencies (altcoins), which leads to their increased market dominance over Bitcoin.

What Are Altcoins?

The term “altcoin” is derived from “alternative” and “coin,” representing all cryptocurrencies that are not Bitcoin. These coins have emerged in the wake of Bitcoin’s success and serve various purposes, offering more advanced features such as faster transaction speeds, lower fees, enhanced security, and even applications beyond payments, like decentralized finance (DeFi) or gaming.

Some popular examples include Ethereum (ETH), Solana (SOL), Toncoin (TON), and meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB). Many of these altcoins have gained significant attention and created waves in the market, which often triggers an altcoin season.

The rise of altcoins during Altcoin Season, with increased market dominance.

What Happens During Altcoin Season?

Altcoin Season is a period when altcoins experience a dramatic surge in prices, often accompanied by increasing market caps and trading volume. This surge occurs in a crypto bull run, leading to altcoins outperforming Bitcoin. During this time, the total market capitalization of altcoins surpasses that of Bitcoin, with investors flocking to emerging cryptocurrencies instead of the more established Bitcoin.

How Does Altcoin Season Compare to Bitcoin Season?

In an Altcoin Season, the market’s attention shifts from Bitcoin to alternative cryptocurrencies. Investors move towards altcoins as their prices rise rapidly, often due to new project launches, technical advancements, or speculative trading. Altcoin Season usually follows a prolonged bull market for Bitcoin, where the price of Bitcoin becomes too high for many average investors, prompting them to explore altcoins as a more affordable investment option.

Conversely, Bitcoin Season is when Bitcoin dominates the market, both in price and market cap. During this period, investors focus more on Bitcoin, and its dominance index — a measure of Bitcoin’s market cap relative to the total crypto market cap — increases. Bitcoin Season typically occurs during periods of market uncertainty or volatility, where investors seek safer, more stable assets.

Bitcoin vs Altcoins comparison during Altcoin Season.

What Triggers Altcoin Season?

Decreasing Interest in Bitcoin

After Bitcoin experiences a significant price surge, its price tends to stabilize at higher levels for prolonged periods. This creates an opportunity for investors to move away from Bitcoin and diversify into altcoins, as the high price of Bitcoin may deter new entrants into the market.

New Crypto Trends: DeFi, NFTs, and Web3

The rise of new crypto trends or technological developments often sparks excitement in the altcoin market, driving demand. For example:

Bullish Sentiment in the Economy

During bull markets, investor confidence rises, leading to an increased appetite for riskier investments. This behavior benefits small-market-cap altcoins, boosting their prices and further contributing to the altcoin market’s growth.

Historical Altcoin Seasons

Late 2017 – Early 2018

In late 2017, Bitcoin’s dominance index was at 87%, but by January 2018, it dropped to an all-time low of 32%. This period saw a massive increase in altcoin valuations due to the ICO (Initial Coin Offering) boom. Altcoins saw unprecedented price growth as numerous new tokens flooded the market.

Early 2021

The introduction of DeFi projects, NFTs, and meme coins sparked a new altcoin season. Bitcoin’s dominance index fell from 70% to 38%, while altcoins’ market share surged from 30% to 62%. This period witnessed the largest bull run in crypto history, with the total market cap reaching over $3 trillion by the end of 2021.

These seasons illustrate the cyclical nature of altcoin seasons, where Bitcoin’s dominance fluctuates, allowing altcoins to shine and gain substantial market share.

Emerging Sectors That Could Drive Future Altcoin Seasons

Artificial Intelligence (AI)

AI has emerged as a dominant narrative in the crypto space, with projects like Akash Network and Render seeing price surges of over 1,000%. Significant investments are also flowing into AI-related infrastructure, with companies like Andreessen Horowitz raising billions for AI ventures.

DePIN and GameFi

DePIN (Decentralized Physical Infrastructure Networks) and GameFi (Blockchain-based gaming) have also attracted investor attention. Projects like Roam (which recently raised $11 million in funding) and Immutable X have seen substantial growth, with the GameFi sector now valued at over $25 billion.

Identifying the Start of an Altcoin Season

Signs of an approaching altcoin season.

Rising Altcoin Dominance

A significant increase in altcoin dominance — the percentage of total market cap represented by altcoins — is one of the strongest signs that altcoins are outperforming Bitcoin.

Increased Trading Volume

A noticeable surge in trading volume for altcoins signals growing interest from investors. For example, meme coins like Dogecoin (DOGE), Shiba Inu (SHIB), and others have recently seen price gains of 40% or more, signaling an impending altcoin rally.

Positive Market Sentiment

A bullish market sentiment typically favors altcoins, driving their prices higher. For example, if Ethereum (ETH) breaks above $3,500, analysts predict it could trigger a broader altcoin season.

Specific Events or Catalysts

Events such as the launch of new, promising altcoin projects, favorable regulatory news, or technological breakthroughs can act as catalysts for an altcoin season.

How to Capitalize on Altcoin Season

If you’re looking to maximize your returns during the next altcoin season, here are a few strategies to consider:

Research and Diversify Holdings

Time Your Entries and Exits

Buy New Altcoins in Presale

Conclusion

Altcoin Season is an exciting and potentially profitable period in the cryptocurrency market when altcoins experience significant price increases and trading volume. By staying informed on key trends, researching emerging altcoins, and timing your investments strategically, you can maximize your potential gains during these seasons of rapid growth.