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In the past few years, we have seen many alternative coins emerge and dwindle in the span of months or even faster. Through and through, bitcoin’s dominance is unmatched and unchallenged by other cryptocurrencies on the market, leading to a bare market with very few opportunities for up-and-coming investors and entrepreneurs alike.
Although some cryptocurrency market critics stay hopeful, today we will discuss what an altcoin and an altcoin season are and if we can expect such a thing to occur anytime soon.
What Is an Altcoin Season?
To begin the discussion, let us bring everyone up to speed on the main subject for today – altcoin. Altcoin is a term that describes any coin that is an alternative to the current market standard, such as Bitcoin. A shortened version of “alternative coin,” it refers to the thousands upon thousands of coins that have emerged after Bitcoin’s inception, many of which are designed to fill specific niches and offer wildly new features to the holder. Many readers have probably heard of such coins as Ethereum or Dogecoin. Such coins fall directly under the altcoin umbrella term.
The main thing that separates these coins from Bitcoin, aside from their name, is that they are all basically sidegrades of the 2009 classic cryptocurrency. Many such coins offer faster transaction speeds, specific benefits or advantages, lower fees, enhanced privacy, smart contract integration, and more.
From the above, you can guess what the altcoin period means. Basically, it is any time an altcoin overtakes Bitcoin in price. For as long as Bitcoin has existed, it has always had the majority share of the commerce size of the digital asset commerce space. At the start of its run, it had nearly all of the trading volume, but recently, these figures have been shifting in favor of altcoins, which can mean an altcoin period is about to come in. With the market so heavily dictated by Bitcoin, BTC to non-BTC trading ratios are the most important metric on the market.
What Can Signpost an Altcoin Period?
Defining when an altcoin period is set to begin or end is a difficult task to undertake since the signals are often varied and not as concrete as some might think. By judging the data from seasons past and conducting thorough market analysis, we can single out a few root causes and post signs for the next altcoin season.
Bitcoin Excitement Waning
We have talked about how, ever since Bitcoin’s inception, it has taken up the role of the digital asset that dictates the rest of the commerce space. So how can the excitement of Bitcoin diminish if it has been the digital asset commerce space leader for all these years?
Well, the short answer is stagnation leads to quick and rapid changes. After a while of Bitcoin prices staying at a very high but stable benchmark, investors looking for momentary profit look towards altcoins in the digital asset commerce space. Selling large volumes of Bitcoin in turn for alternative cryptocurrencies makes for the first of the two building blocks of an altcoin season. The second is newcomers to the field. With Bitcoin prices staying high and new investors in the field not being able to meet those prices, many turn to the more favorable altcoin prices. These two factors, when put together, can greatly diminish Bitcoin’s sway over the market and contribute to the altcoin period to come.
Moreover, the upcoming 2024 Bitcoin halving is set to shake up things for Bitcoing quite heavily. The upcoming halving is scheduled to take place somewhere around April of next year, although we can not accurately pinpoint the date due to a variety of variables affecting it. Usually, this halving results in a drastic increase in the Bitcoin price, but it is not quite guaranteed. How the halving will affect Bitcoin prices will vary depending on a myriad of reasons.
The last Bitcoin halving took place in May of 2020. Looking back at the data, we and many other experts can say that the halving greatly increased interest in Bitcoin and its overall price. On the day of the halving that year, Bitcoin was priced at around $9K and, by the end of the year, rose to nearly $16K.
Digital Aasset Commerce Movements
A lot of the time, new and fresh technology that is supported by digital assets can easily sway the market one way or another. Therefore, launching a new cryptocurrency with unique features targeting the new technology can drastically diminish Bitcoin’s power in the commerce space. Moreover, this signal can work wonders if these cryptocurrencies emerge as part of an up-and-coming crypto trend that aims to provide solutions to well-known problems of the digital asset market.
For example, look at the altcoin periods we have witnessed in the past 4 years. Decentralized finance in 2020, non-fungible tokens in 2021, and Web3 in 2023 all supplied the likelihood of altcoin coming into power in their respective years.
Bull Market Mentality
In the current state of the world, with most countries enjoying a stable and growing economy, many people are finding themselves with the means to invest and populate their economic repertoire with cryptocurrency. This general notion leads many people to search for high-risk and quick reward mechanisms from which to profit. Altcoins can serve just the right function in certain circumstances. This rising interest in altcoins can boost altcoins with even the smallest market caps.
Moreover, experts in the field predict a bull run will emerge somewhere next year. These opinions are stimulated by a variety of factors, such as many newly found technologies in the field that are not accumulating positive sentiments and tendencies. With NFT prices trending downwards, metaverse and Web3 are not quite able to pick up the slack. Additionally, experts’ gut feeling about the upcoming bull run is based upon the fact that for the last two years, the digital asset community has been in a sort of drought, with the last bull run dwindling sometime in late 2021. Experts express that after such a long crypto winter, the cycle is guaranteed to repeat, and prices on cryptocurrency are soon to skyrocket.
Market sentiment concerning meme coins
Meme coins often experience significant growth in spurts or in pump-and-dump trends. Such coins experience high levels of popularity with the use of social media platforms and other communication platforms on the Internet. However, this popularity period tends to die down rather quickly.
Moreover, when one meme coin gains enough traction, it tends to bring the investor’s attention to many other meme coins, not so subtly swaying the power into altcoin’s hands. Such trends can lead to new massive buying habits that boost the popularity and power of multiple altcoins at the same time.
The crypto fear and greed index is a great online tool to track such market sentiment activity in real-time. The index takes a menagerie of factors such as price fluctuation, trading volumes, and more to display the sentiment of traders accurately.
Crypto Newsletters and Events
This signal is somewhat similar to the one we talked about before, but major events and news in the crypto industry can heavily sway the favor into the altcoin’s hands. We have mentioned previously how breakthroughs in decentralized technologies can easily manifest in a new altcoin season, but moreover, major announcements or unexpected partnerships can often garner enough attention to sway the market into the hands of the altcoins. Traders worth their salt always keep a close eye on monitored news sources and new altcoins to jump in on an opportunity when it arises.
How to Capitalize Off of the Altcoin Period
Specific commerce tactics are required to profit successfully off the altcoin period and to optimize your potential profit during such a period. The altcoin period is a rare time when traders can easily diversify their portfolios without it being a complete waste of time and money. During the period when altcoins rise above Bitcoin, it may be smart to explore a variety of altcoins so traders can capitalize on the popularity of more than one of these coins.
With the use of commerce analysis and data collection systems that are avidly available on the Internet, a trader can guarantee their success even further. A trader worth their salt will use chart patterns, volume analysis, and other means to successfully identify opportune moments to pump or dump their investment into the altcoin.
Moreover, “whale watching” can be an extremely handy tactic for traders everywhere. By closely monitoring the performance of influential individuals or thought leaders in the field, traders can get a pretty good idea of things to come. Such people often have a lot of say in what happens in the cryptocurrency commerce spaces and can easily sway the market one way or another; hence, traders should keep a closer eye on their activity.
This might sound easy on paper, but in actuality, it requires a certain skill set to accomplish; for whale watching to commence, a trader needs to successfully track down a whale’s wallet or digital trading address to even start noticing patterns in their buying and selling patterns. However, once this is properly set up, whale watching can prove to be an immaculate tool in the trader’s toolbelt, as with its help, a trader can easily tell trends a mile away, anticipate price shifts, and commence more aware trades.
Whales can easily sway the commerce space by placing huge trade orders on smart contracts, hence making artificial supply and demand imbalances that would easily sway the price of a token one way or another.
To Cap Things Off
The altcoin period can be a time of incredible profits and incredible losses. Once Bitcoin’s power is lifted, it will be a very alluring freedom to expand your digital assets portfolio. While this desire can easily turn into a massive loss, it can just as easily turn into a massive success with the right strategy and trader mentality. With the right data, market analysis, and comprehensive systems, a trader can easily succeed in the upcoming altcoin period. However, ventures at this time must be taken with high caution as it is not too uncommon for traders to experience substantial losses due to poor decisions in this trying time frame.
