A market phase characterized by a surge in altcoin investments.
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:
Bitcoin Rally: The cycle typically begins with Bitcoin making significant gains
Ethereum and Large Caps: Investment flows to Ethereum and other large-cap altcoins
Mid-Cap Altcoins: The rally extends to mid-capitalization projects with established use cases
Small-Cap Explosion: Eventually, even small and micro-cap projects see dramatic price increases
Market Exhaustion: The cycle often ends with unsustainable valuations leading to market correction
• 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
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.
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.