What is Altcoin Season? When and Why?

What is Altcoin Season? What does it mean for traders and investors in crypto? This publication will help you know.

What is Altcoin Season?

Altcoin season is a time when alternative cryptocurrencies (altcoins) do better than bitcoin (BTC). I mean the price.

There is a lot of trading going on around the world in Bitcoin, which is the biggest cryptocurrency by market capitalization. In fact, Bitcoin controls such a big chunk of the trading volume in cryptocurrency markets that there is a well-known way to compare it to cryptocurrencies that are not Bitcoin. “Bitcoin dominance” is a good name for this metric, which is the ratio of Bitcoin’s market cap to the caps of all the other cryptocurrency markets.

Bitcoin used to be very popular, but altcoins have made it less popular, and they are becoming more popular all the time. It might be the start of an altcoin season when several altcoins gain enough market cap to pass Bitcoin’s market cap.

When there is an altcoin season, altcoins usually do better than Bitcoin. This makes Bitcoin less important in the crypto market. Traders and investors with diversified portfolios know about altcoin seasons and make changes to their portfolios based on them.

Why does it happen?

There are many things that can lead to an altcoin season, but we cannot say for sure what causes it. There could be an altcoin season because of these two things.

Moving funds from Bitcoin to other crypto

It is likely that the price of Bitcoin will become more stable after a big move up. So, investors looking for better ways to make money might trade their bitcoin for altcoins, which could lead to an altcoin season.

Changing trends that involve altcoins

The year 2020 was DeFi. It was NFTs in 2021. And right now, both Web 3.0 and Web 3.0 tokens are becoming more popular. The blockchain space is always changing and coming up with new ideas. It is this never-ending change that has led to the current pool of altcoins with strong use cases.

Because the business is always changing, some altcoins may get more attention than Bitcoin. There is a trend for the market cap to rise when traders and investors buy and sell certain altcoins. This could lead to an altcoin season in the future.

When is the perfect time to buy altcoins?

You can buy or sell altcoins at any time. Because cryptocurrency markets are so unstable, no one can perfectly time an altcoin season or say for sure how long it will last.

You should always learn more about the altcoins you are interested in on your own. It is important to know how valuable they are in the crypto world and what risks they might come with. For traders with less time to wait, they can also use different technical indicators to keep an eye on how the prices of altcoins move and form patterns.

Conclusion

As an alternative to Bitcoin, altcoins are a good choice for traders and investors who want to spread out their holdings. You can do more research on your own before investing in an altcoin of your choice now that you know when altcoin season is.