Coins & Tokens

What is altcoin season?

An altcoin season is a period of time in which we see many altcoins significantly go up in value. During this time many in the crypto industry hype around some altcoins, while trying to make enormous financial gains. 

There are now thousands of altcoins and new ones keep popping up all the time. An altcoin season is not a set period of time, but rather a phenomenon that occurs when the cryptocurrency market experiences a surge of interest and activity around altcoins. Very often many altcoins surpass Bitcoin's growth rate during one of these seasons. Making it a super interesting period for those that are looking to make a good profit.

During altcoin season, investors may be tempted to buy into these cryptocurrencies, hoping to make a quick profit. However, it is important to note that investing in altcoins can be risky. Especially as many of these projects are still in their early stages of development, and may not have proven themselves in the market. Besides that the altcoin market can change sentiment very fast, making it difficult to predict which coins/tokens will perform and which ones won't. 

Despite the risks, many investors see altcoin season as an opportunity to get rich. Some even consider some altcoins to be the future of crypto, as they often offer a unique use case and innovate on existing problems.

What are altcoins?

The terms altcoins originally meant every other crypto besides Bitcoin. But these days many people also consider Ethereum to not be an altcoin anymore. But rather a household name.

So we could say that altcoins are all the coins and tokens under Bitcoin and Ethereum. This might change in the future if other cryptocurrencies could gain market share and overtake both of these giants. Which is not so likely. 

When looking at altcoins there is more than just one type. Because not all altcoins are alike. Some of the early altcoins were trying to do the same thing as Bitcoin but “better”. This idea however did not work out for most of them. And nowadays we do not see a lot of projects popping up anymore with the claim to be the better digital cash. 

Almost all of the (new) altcoins now focus on being a new and better layer 1 for smart contracts. Or they are tokens on one of the layer 1 blockchains that can be used for certain things. Although most of the layer 1 coins function more or less the same, being used for transaction fees, stacking, and burning. Whereas the other altcoin tokens can have hundreds of different use cases. With utilities in games, fan tokens, governance tokens and so much more. 

Because there are so many different types of altcoins it is best to study each one separately. Many of them are completely useless while many others have some very good products behind them that make them valuable. 

Why do Altcoin seasons happen?

Not all altcoin seasons happen for the same reason. But most of them come down to a few factors combined. 

  • Optimism + greed
  • A new crypto trend
  • Crypto bull market
  • New innovation

A combination of these scenarios is usually what could cause the start of a booming alt-season. As many people change their few altcoins and start seeing a high return in buying them. This part, we could call the optimism and greed part. When people either expect or really want high returns.

This will usually go in combination with a new trend in crypto like Defi, that sparks the curiosity of investors. Many of them want to jump on the train before it leaves the station. Which usually kicks off the season and makes others want to get in too. Making the price rise only by the fact that everyone wants to profit from the trend. 

Now not only the trend in these specific coins influences a run-up. Also the general crypto market and macro market have their influence on it. So when they both go down it will likely not create a setting in which a 100x altcoin will flourish. For this to happen it works best if the Bitcoin market and the stock market are also booming.

Next to all these things, some new innovations are the last key to why altcoin seasons happen. Because it is usually a new innovation that sparks all the other above-mentioned points. While also sparking interest from groups that might not have taken a look at Alts before. One example of this was the gaming trend where we could see some non-crypto people laying their eyes on gaming assets. Simply because they like games and might want to have these coins to play the games or get ahead in the game.

The general crypto season cycle

Not only do altcoins experience seasons, but also the crypto space as whole experiences large cycles that each have their season. These crypto cycles usually evolve around the Bitcoin halving. This is an event that takes place roughly every 4 years, in which the Bitcoin mining reward is cut in 2. Ever since the start of BTC the crypto cycle has been a thing with the Bear markets taking place during the crypto fall and winter, and the bull market during the crypto spring and fall. 

With each cycle Bitcoin’s market cap has grown bigger and its influence on the world too. But not only does Bitcoin move during these cycles, but many altcoins also do too. Although there can be many altcoin seasons during a crypto cycle. Most of these seasons do take place when the while or after the general market went up. Because when BTC moves the rest usually follows.

How to spot an Altcoin season

Spotting an Altcoin season is something that you get better at if you have seen some Bitcoin cycles. Because with every cycle new altcoin seasons come by. And for those of us that have seen some or sat on the sidelines of some, have been taking nodes. Spotting a new season does require a little bit of experience and skills. So if this is only your first time please do not go nuts right away. As it is much easier to get burned with Alts than it is to make a 100x gain. However, if you are still new some tools like the Altcoin season index could help you to spot a new trend.

Altcoin seasons are simply just hard to spot. But they usually do give you some signs before they really start. Some of these signs are the following.

  • Bitcoin finished a bear market/winter period
  • A new altcoin trend is starting. Think about AI, gaming, Defi, etc.
  • A few new coins have exploded signaling a trend reversal and bringing some hype back to the industry.

How long does an altcoin season last?

Not every altcoin season stays around for the same amount of time. However, most of them generally last between 2 and 6 months, when we look at the altcoin season index. With many of them lasting around the time of a season on Earth. 

One of the most important factors that determine the length of an altcoin season is of course, the state of the overall cryptocurrency market. If the market is in a bull run, with Bitcoin and other large cryptos going up significantly, altcoins tend to follow and experience a surge in value as well. With some of them going up a 10 or even 100X.

However, if the market sentiment turns bearish, with Bitcoin, the market as a whole experiences significant price drops. And altcoins are also likely to suffer a decline in value. In this situation, an altcoin season may not last very long, as investors tend to flee from risky investments such as altcoins and move their money to stablecoins and fiat.

But besides the influence of crypto markets, macroeconomics also influences the altcoin seasons as well. Because when we see a bear market starts in stocks, most other assets will follow. So altcoins might experience a hard time when the macro trend turns downwards. 

Even if the trend of macroeconomics does not change during the season many of the seasons are still affected by other larger trends like the trend/hype in AI tech or the DEFI trend in 2020. If an alt season is highly focused on a current trend you can best keep an eye on how that trend is developing. Because the season will most likely end when the trend turns down or the hype fades away.

Altcoin season trends

With almost every crypto cycle at least a few new altcoin trends start. Which usually are the cause for the start of a new alt season. Over the years there have been several different trends. But it is quite rare to see a second trend for the same type of token.

Even since the early days of crypto altcoin trends have been around. The first trends are small and less focussed on a whole group of altcoins. But rather on single altcoins or all altcoins together. As there were not that many around before the creation of Ethereum. But after its creation, we saw the first altcoin trends picking up. With many of them getting their roots in 2017.

In 2017 we saw some huge altcoin seasons with several months in which we saw almost all altcoins increase hundreds of percentages in price. With most of them having a 99% decline in the year after. 

Then in 2020, we saw a few trends come up with some trends in DEFI, Layer 1 smart contract blockchains, Memecoins, and gaming coins. During this bull market, many of the early investors in these trends made a lot of new riches. 

But after the 2020/2021 bull market was over, many of these hypes faded away. Since then other trends like AI and NFTs have been taking the spotlight and could be the leading trends of the next Bull market. However, like with all forms of predicting it is almost impossible to do it right. So what kind of coins will lead the pack during the next bull run is something we can't say for certain yet. But keeping your eyes on the trends that slowly start to form might give you a nice heads-up. 

Are there also NFT seasons?

Just like altcoins have their season. NFTs can also have theirs. However, because NFTs are still very new we have not seen that many real seasons with them. The only real NFT season we have seen so far was during the 2020/2021 bull market. In which we saw a huge rise in NFT holders and traders. During this time we have seen NFTs being sold for millions of dollars. And a hysteria of people trying to spot the next 100x NFT collection. 

But since that bull market was over no general NFT season has come by yet again. We did however see a lot of hype coming to some specific NFT collections that multiplied its floor price by many times. And also the tokens and volumes of NFT marketplaces have seen many ups and downs. This gives us the idea that NFTs are here to stay and won't just simply fade away in the background. 

So if they will stay around, we will likely see another full-blown NFT season coming around at some point. When this will be, no one can tell. But keep your eyes open for the volume on the marketplaces and specific collections quickly rising in price. As this could indicate the start of a new season. Similar to an altcoin season, NFT seasons could show the same indicators that an exciting period will come soon. 

Best time to buy altcoins?

The best time to buy Altcoins is when no one else is buying them. Yes, this might sound strange but just as with many other assets, if everyone is buying them, it means you are already late to the party. So yes if you want to buy altcoins it is better to be early than late. Especially because most alt seasons end with a huge altcoin market crash. 

So the best buying opportunities are usually when no one is paying attention yet and the prices are low. Often these moments occur during bear markets. When the crypto hype dies down and no one looks at altcoins anymore. During these times altcoins usually do not make crazy gains. But because of the lack of hype, the price won't be super high. Giving way to sometimes very interesting buying opportunities.

Not only can this be a great time but also when you feel like a bull run is about to start. As long as you get in the market before everyone else does. So even if the price already went 3x in a specific coin in 2 weeks, it does not mean that it can't do another 10x. It all depends on whether or not most people already got in. Everyone that got in before will likely make a gain. 

So look at the trend and also be realistic that if it has already started, you might already be late.

How to profit during an altcoin season?

Profiting from an altcoin season all depends on buying and selling at the right time. As I mentioned before, buying at the right moment makes a big difference as you always want to buy in before the masses do. But another thing is very important to actually make a profit from an alt season. And that is selling at the right time.

What happens to a large number of people that got in early during a new altcoin trend is that they make very nice gains. A 3x or maybe even a 100x in some cases. However, as we are all human we all suffer from the same problems. In this case, greed. After making a 100x many people want/expect to make another 10x. This however rarely happens. And it is more likely to go down 99% after a 100x than to go up by 1000%. 

So to protect ourselves from our own greed we should have target goals in mind at which we will sell. If we do not we usually end up holding the back, with shitcoins that will only keep on going down. Making sure to sell in time (when you are in profit) can make the difference between making a good sum of money and losing a good sum. 

But keep in mind that your goals should be realistic as hoping for a 100x with every investment you make is not realistic. Sometimes you have to keep in mind that a 3x or even a 10% gain is also a very nice return on investment. Or you could put a stop-loss order at a level where you still make a gain that you could be happy about.

How to not get wrecked by an Altcoin season

Not getting wrecked is all about not gambling with the money you need. That's a first. Never ever buy altcoins with the money that you need. If you don't invest with money you need, you also can't lose it.

Not getting wrecked must always be your focus, and the tips I gave before can help you with that. But just to repeat. 

  • Don't use money that you will need in the future
  • Make a plan to get out on time
  • Don't start to invest when everyone is hyping in
  • Study the things you are investing in

Following these simple tips will prevent you from making the main mistakes beginners make when they start buying altcoins. But if you just started with crypto and altcoin might look like the wild west to you. You might prefer to simply start with the larger cryptos and make sure you understand exactly how they work and what you can do with them. 

Having a basic understanding of the crypto space and having used some blockchains and Dapps will give you a strong advantage when it comes to making investments in the whole crypto space, including altcoins.

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