Altseason 2024: Secrets of the Altcoin Season and Profit Strategies

Cryptocurrency markets exhibit cyclical movements between periods dominated by Bitcoin and phases where alternative tokens gain prominence. The most exciting stage of these cycles is known as the altseason, such as the upcoming altcoin season 2024. Recently, the character of the altcoin season has significantly changed, with new dynamics emerging such as increased liquidity in stablecoin pairs and the participation of institutional investors.

The activity in the market in December 2024 is fueled by expectations that the Trump administration may adopt a crypto-friendly policy. This development occurs immediately after Bitcoin halving events and the approval of spot Bitcoin/Ethereum ETFs, following the rising institutional interest in crypto assets. Investors are optimistic that the next altcoin season is just around the corner.

What is Altseason: Basic Concepts

The term altseason describes a period during a bull market when the total market capitalization of altcoins surpasses that of Bitcoin. Unlike previous cycles, recent altcoin seasons are not simply the result of capital fleeing Bitcoin. Instead, trading volumes on stablecoin pairs, influx of institutional funds, and increased interest from new market participants are the fundamental drivers of this season.

During a typical altseason, Bitcoin’s market dominance decreases, trading activity in altcoins and retail investor interest increase. This period is usually characterized by rapid price increases, high trading volumes, and new project launches.

Difference Between Altcoin Season and Bitcoin Season

In altcoin season, the market focus shifts from Bitcoin to alternative cryptocurrencies. Speculative trading, technological developments, and rising utility expectations play roles in this shift. Many altcoins outperform Bitcoin during this period.

Bitcoin season, on the other hand, operates under an opposite dynamic. Investors perceive Bitcoin as digital gold and tend to abandon riskier altcoins. The Bitcoin dominance index (BTC’s share of the total crypto market value) rises, and altcoins become stagnant. This trend becomes more pronounced in bear markets.

The Evolution of Altseason 2024

Stablecoin Liquidity Becomes the New Engine

In earlier periods, altseason would start when Bitcoin prices consolidated. Investors moved from Bitcoin to altcoins seeking higher returns. The ICO boom of 2017 and DeFi movements of 2020 were results of this dynamic.

Today, this has changed. Stablecoins like (USDT, USDC) have established a new order in the market with increasing liquidity. These stablecoins provide easier entry and exit points for investors, directly affecting altcoin trading volumes. As a result, altcoin transactions based on stablecoins now reflect the real growth of the market.

Role of Ethereum and Institutional Capital

Ethereum often plays a leading role during altseason periods. Developed around the DeFi ecosystem and NFT market, Ethereum offers diversification opportunities for investors. As institutional investors begin to invest beyond Bitcoin, large-cap altcoins like Ethereum gain importance.

This trend also supports the rise of projects on platforms like Solana and similar ecosystems. Investors with increased risk appetite are starting to show interest in smaller tokens listed on these platforms.

Bitcoin Dominance Remains a Critical Indicator

Market analysts emphasize that Bitcoin dominance remains the most reliable metric to predict the start of altseason. Historically, when Bitcoin dominance drops below 50%, it signals the beginning of an altseason.

While Bitcoin prices are consolidating between $91,000 and $100,000, Ethereum and other altcoins are finding favorable conditions to attract liquidity.

Altseason Index Reflects Market Conditions

Blockchain Center’s Altseason Index measures the performance of the top 50 altcoins relative to Bitcoin. Readings above 75 indicate that most altcoins are outperforming Bitcoin. As of December 2024, the index stands at 78, indicating the market is already in altseason territory.

History and Key Factors of Altcoin Season

Return to 2017-2018

During that period, Bitcoin’s dominance fell from 87% to 32%. Tokens like Ethereum, Ripple, and Litecoin gained massive attention during the ICO boom. The total crypto market value surged from $30 billion to over $600 billion, with many altcoins reaching all-time highs.

However, regulatory pressures and failed projects brought this season to an end.

The Magnificent Altseason of 2021

Bitcoin dominance dropped from 70% to 38%. Altcoin market share increased from 30% to 62%. DeFi, NFT, and memecoin sectors recorded tremendous gains. The total crypto market cap exceeded $3 trillion.

Trends from late 2023 to mid-2024

Expectations of Bitcoin halving and optimism around spot Ethereum ETF approvals drove the market. This period showed a different altseason character, with focus on AI tokens and GameFi projects.

AI Tokens: Projects like Render (RNDR) and Akash Network (AKT) experienced gains exceeding 1,000%.

GameFi Platforms: Protocols like ImmutableX (IMX) and Ronin (RON) revived.

Memecoins: Memecoins evolving with AI integration gained new interest. Memecoins in the Solana ecosystem, in particular, saw a growth of over 945%.

Corporate Impact and Q4 2024 Outlook

In January 2024, spot Bitcoin ETFs received approval, boosting institutional participation. The election of crypto-friendly politicians and positive expectations for the upcoming administration strengthened market sentiment.

The total global crypto market value surpassed $3.2 trillion, exceeding the 2021 peak. Bitcoin is approaching the psychologically important $100,000 level. Analysts expect this level to be surpassed before the end of the year and to rise further into 2025.

These factors indicate a mature market environment with diversified investment opportunities.

Four Phases of Liquidity Flow

First Phase: Strengthening Bitcoin Dominance

During this phase, capital flows into Bitcoin seeking stability. Bitcoin dominance index rises, trading volumes increase, and altcoins remain stagnant.

Second Phase: Ethereum Begins to Rise

Investors start showing interest in DeFi and Layer-2 projects. The ETH/BTC ratio increases, and Ethereum prices accelerate.

Third Phase: Major Market Cap Altcoins Move

Projects with established ecosystems like Solana, Cardano, and Polygon experience double-digit growth.

Fourth Phase: Full Altseason Begins

Small market cap tokens and speculative projects dominate. Bitcoin’s dominance drops below 40%, and parabolic gains occur.

How to Recognize the Start of Altseason?

1. Bitcoin Dominance Decline: Falling below 50% signals altseason.

2. ETH/BTC Ratio: Rising ratio indicates Ethereum is outperforming Bitcoin, often preceding a broader altcoin rally.

3. Altseason Index: Readings above 75 suggest the start of altseason.

4. Increasing Trading Volumes: Growth in sectors like (AI, memecoin) trading volumes indicates market interest. Gains over 40% in memecoins like DOGE, SHIB, BONK, PEPE, and WIF show strong altseason potential.

5. Social Media Activity: Hashtags and influencer discussions point to rising retail interest.

6. Sentiment Shift: Moving from fear to greed signals a bullish trend for altcoins.

7. Stablecoin Liquidity: Rising trading volumes in stablecoins like USDT and USDC are key indicators of altcoin market activity.

How to Buy Altcoins

Key steps for investing during altseason:

1. Choose a Platform: Select a reliable crypto exchange offering a wide range of altcoins. Over 800 cryptocurrencies and strict security standards are important.

2. Create an Account: Register with email or phone number and complete KYC verification.

3. Security Settings: Enable two-factor authentication (2FA) to protect your account.

4. Deposit Funds: Add fiat or crypto funds via bank transfer, credit card, or P2P.

5. Search for Altcoins: Find tokens by symbol or name.

6. Place Orders: Complete purchases with market orders (market buy) or limit orders (buy at specific price).

7. Manage Holdings: Store, trade, or withdraw your altcoins to external wallets. Some tokens also offer passive income options.

Best Practices for Trading During Altseason

• Research Thoroughly: Investigate project fundamentals, team, technology, and market potential before investing.

• Diversify: Don’t put all eggs in one basket. Spread investments across different sectors and tokens to reduce risk.

• Set Realistic Goals: Avoid dreams of quick riches; aim for reasonable gains.

• Risk Management: Use stop-loss orders, and balance potential rewards against risks.

• Resist Hype: Conduct fundamental analysis without being swayed by social media excitement.

Risks and Precautions in Altcoin Investing

Volatility: Altcoin prices can be more volatile than Bitcoin. Illiquid markets may have high spread costs.

Hype and Speculation: Artificial price inflation can lead to bubbles and crashes.

Fraud: Be cautious of rug pulls and pump-and-dump schemes.

Regulatory Risks: Changes in legal frameworks can impact markets. Positive regulations like (spot Bitcoin ETF approvals) can boost interest, while negative developments may dampen enthusiasm.

Conclusion

Altcoin season 2024 offers significant opportunities for skilled investors. By analyzing the market well, diversifying your portfolio, and applying solid risk management principles, you can benefit from this season. Deep understanding of market dynamics is key to successfully navigating altseason.