Term

Altseason

A market phase characterized by a surge in altcoin investments.

Type:
trading
Also known as:
Altcoin Season
1
definition

Altseason, short for "Altcoin Season," refers to a phase in the cryptocurrency market where investments predominantly flow into altcoins, rather than into established protocols like Bitcoin (BTC) or Ethereum (ETH).

This phenomenon often occurs following the onset of a bull market, as traders seek to diversify their gains from major holdings into a broader range of crypto assets. The resulting influx of investment into lower-cap coins can trigger rapid price increases, attracting further investment and amplifying the effect.

Historically, altseasons have followed a somewhat predictable pattern in the larger market cycle:

  1. Bitcoin Rally: The cycle typically begins with Bitcoin making significant gains

  2. Ethereum and Large Caps: Investment flows to Ethereum and other large-cap altcoins

  3. Mid-Cap Altcoins: The rally extends to mid-capitalization projects with established use cases

  4. Small-Cap Explosion: Eventually, even small and micro-cap projects see dramatic price increases

  5. Market Exhaustion: The cycle often ends with unsustainable valuations leading to market correction

Example 1.1 - Historical Examples

2017-2018 Altseason: Following Bitcoin's rise to nearly $20,000, numerous altcoins saw gains of 1,000%+ within weeks

2021 Altseason: After Bitcoin reached new all-time highs around $65,000, many altcoins significantly outperformed BTC in percentage terms, with some seeing 10-100x returns

2
caution

Altseasons are characterized by extreme volatility and can end as abruptly as they begin. While they present significant profit opportunities, they also carry substantial risks:

Extreme Volatility: Altcoin prices can rise dramatically but may crash even faster

Market Manipulation: Lower-liquidity altcoins are vulnerable to pump-and-dump schemes

Project Quality: During altseasons, even projects with questionable fundamentals may see price appreciation

FOMO Psychology: Fear of missing out can lead to irrational investment decisions

Experienced traders often use techniques like trailing stop-losses, taking profits incrementally, and maintaining a core portfolio of higher-quality assets to manage these risks.

Example 1.2 - Identifying Altseason

Common indicators that an altseason may be underway include:

Bitcoin Dominance Declining: Bitcoin's share of total crypto market cap falls below historical averages

Altcoin/BTC Pairs Strengthening: Many altcoins start outperforming Bitcoin in trading pairs

Increasing Trading Volumes: Significant upticks in altcoin trading volumes across exchanges

Media Attention Shift: Growing coverage of altcoin projects beyond just Bitcoin

New Retail Interest: Surge in new participants entering the cryptocurrency market

All terms and definitions may update as the Cryptionary improves.