Since 2021, the crypto market has been under the Bitcoin season, meaning that no other altcoin reached its value. And while this isn’t really an unfortunate situation because Bitcoin was the first digital asset ever created, it doesn’t offer the opportunity for altcoins to shine and show their true potential. This is also why only a few coins out of more than 20,000 are leading the market, such as Ethereum and Tether.
After one of the longest Bitcoin seasons, it’s time for altcoins to show off. Experts analyzed charts and the market’s history recently and concluded that an altcoin season is closer than we might think. Therefore, it’s the best time for investors and new users to dwell on how to buy Bitcoin on Binance as fast as possible until its price declines and becomes less valuable. But what will happen if Bitcoin reaches second place?
What are altcoins in the first place?
Altcoins wouldn’t exist without Bitcoin because they’re literally alternatives to it. These digital currencies were created after Bitcoin’s white paper, but their utility doesn’t stop at being a store of value and expands to more features than that. Some of these coins include Ethereum, which introduced the use of smart contracts, and Ripple, known for its digital payment protocol. Moreover, these digital coins might be of smaller value, but their prices are more stable than Bitcoin, which is sometimes incredibly volatile.
Therefore, an altcoin season is when these digital assets experience increased prices, and Bitcoin’s value is overthrown by all their efforts. During this period, altcoins naturally have a lower market capitalization and can provide higher returns. If an investor diversifies their portfolio with numerous altcoins, they’ll receive more than a Bitcoin investment.
What influences the occurrence of the altcoin season?
An altcoin season doesn’t simply appear out of nowhere, and its materialization depends on several factors, including market cycles. Besides, here’s what usually triggers altcoin seasons:
- Market sentiment is crucial to the switch of a particular season, so depending on what investors’ attitude towards crypto is, bitcoin prices can decrease as a result of selling BTC holdings for profits or increase, leading them to altcoins;
- Media coverage plays a vital role in how investors perceive a specific asset. At the same time, if a crypto sector develops more projects or is simply researching new ways to improve, the media will bring attention to it, increasing investors’ interest;
- Available technological developments also bring prices up and down. That’s why Bitcoin season is over because it didn’t provide much of a change in regard to the blockchain, while altcoins like Ethereum are continuously upgrading the network;
How to trade and invest during the altcoin season
Soon enough, we’ll get to see the altcoin season index in a greater position than Bitcoin, and if this is accompanied by an increase in market capitalization of altcoins, be sure that the season will happen at one point or another. So, you must be prepared to trade and invest according to the features and characteristics of it.
What you can do best is invest in a range of altcoins and expand your views on what is promising or not. That’s because most people choose Ethereum as an altcoin, but considering its market cap and fame, it can’t protect the portfolio like a range of altcoins. The force of an increasing number of digital assets offers better performance and also reduces volatility effects on the portfolio.
Another way of being up-to-date with the latest market changes is by studying charts and analyzing resistance levels. Although this implies you have a thorough knowledge of reading charts, it’s better to be prepared than to be hit by the sudden market crash of Bitcoin. If you’re a beginner, you can do the classic whale watching, see what others are doing with their portfolios, and try copying them. However, you need to choose reliable and trustworthy individuals and institutional investors for this method to be successful.
Be prepared to withstand the risks of an altcoin season
Besides numerous opportunities for profit, risks are included during the altcoin season. First, volatility is expected to increase since there are rapid price movements that are true to provide significant gains but also considerable losses. Therefore, make sure you don’t jump ahead in trading altcoins and take things slowly because you need to be prepared for any price change.
Altcoins with the smallest market cap might have incredibly low liquidity this season, making it difficult to enter and exit the positions you wish for and increasing trading costs. It’s best to be cautious while setting stop-loss orders and do everything you can to protect your capital.
What are some trustworthy altcoins to look at this season?
Besides Ethereum, which is the best cryptocurrency and altcoin at the moment after Bitcoin, you should also consider other options to diversify your portfolio. For example, Cardano is similar to Ethereum since it leverages smart contracts and decentralized applications and is incredibly secure, scalable and sustainable.
On the other hand, Solana is specially designed for dApps and decentralized finance. The altcoin is known for increased scalability and low fees with rapid transaction processing systems, making it the perfect alternative to Ethereum and Bitcoin, whose costs have surged considerably in the past months.
A less serious altcoin is Pepe, the cryptocurrency inspired by the meme with the same name. Although it seems like a silly coin to have, Pepe had one of the best performances on the market this year, becoming the third-biggest meme coin after Dogecoin and Shiba Inu. If not, try following meme coins to invest because their results are significant in value when they’re trending.
Final considerations
After a never-ending Bitcoin season, it’s time for altcoins to take power and give investors considerable returns. Altcoins have been increasingly popular in past months, which is only a factor leading to their season precedence. Therefore, we’ll wait and see when the altcoin season occurs because even though experts expect it, the market is highly unpredictable.
