Altseason (Altseason) in the crypto market: when is the time for altcoins?

The cryptocurrency market moves in cycles, and it is critically important for investors to understand the patterns of these cycles. This is especially true during periods when alternative coins surge ahead — so-called altseason. While in previous years such periods were associated with simple capital rotation from Bitcoin into altcoins, today the dynamics have changed significantly.

According to analysts, in the current stage of the crypto market development, the main roles are played by the liquidity of stablecoins and the inflow of institutional capital. These factors now determine the intensity of the altcoin rally much more than speculative rotations between trading pairs.

What is behind the concept of altseason?

Altseason is a period when altcoins outperform Bitcoin both in price and trading volume. A classic sign of such a period is when the total market capitalization of alternative cryptocurrencies begins to surpass Bitcoin’s dominance.

Historically, the first altseasons were directly linked to technical analysis: when the Bitcoin dominance index dropped below 50%, it was a clear signal of a capital shift into altcoins. However, from 2020 to 2024, the picture has become more complex. Now it’s important to monitor not only where the capital is moving but also where it is coming from.

The key difference in the modern period: altcoins grow not only because money is transferred from Bitcoin. They grow thanks to:

• Expansion of liquidity in trading pairs with stablecoins (USDT, USDC)
• Influx of new institutional investors
• Maturation of the crypto ecosystem and real blockchain usage

Bitcoin versus altcoins: who dominates at any given moment?

In a bull market, the market is divided into two opposing phases. During Bitcoin season, investors focus on the main cryptocurrency, often seeking safety. Bitcoin’s dominance index rises, while altcoins stagnate or even fall.

In a bear market, this logic is even sharper: investors flock to stablecoins or Bitcoin as “digital gold,” completely ignoring alternative coins.

But when altseason arrives, the picture changes dramatically. Trading volumes for altcoin pairs soar, prices jump by tens or hundreds of percent, and investors actively explore new projects in search of the next “mini-Bitcoin.”

How has altseason evolved: from ICOs to institutional involvement

2017-2018: the ICO era

The first significant altseason coincided with the boom of initial coin offerings (ICO). Bitcoin’s dominance fell from 87% to 32% — a record decline for that time. Riding the wave of Ethereum, Ripple, Litecoin, the crypto sector’s market cap soared from $30 billion to $600 billion. However, regulatory pressure quickly halted this euphoria.

2021: DeFi, NFTs, and memecoins

The second wave of altseason had a very different nature. Bitcoin’s dominance dropped to 38%, while the share of altcoins rose to 62%. This wave was driven by DeFi protocols, NFT mania, and even memecoins. The total crypto market capitalization reached unprecedented $3 trillions.

2024: market maturity and institutional involvement

The current altseason is developing differently. Approval of spot Bitcoin ETFs early in the year led to a surge of institutional capital. Over 70 different funds received approval. This created a completely different dynamic — money flows not in waves of hype but in a thoughtful and sustainable manner.

Signs indicating the start of altseason

There are several reliable indicators:

1. Bitcoin dominance index

A classic signal is a drop below 50%. Historically, this almost always signaled the beginning of altseason. As of December 2024, Bitcoin dominance is around 59-60%, but a potential decline is visible on the horizon.

2. ETH/BTC ratio

An increasing Ethereum to Bitcoin price ratio is a barometer of altseason. When Ethereum starts recovering faster, it’s the first sign of shifting interest.

3. Altseason Index (Altseason Index)

Specialized tools like the Blockchain Center Altseason Index measure the performance of the top 50 altcoins relative to Bitcoin. A value above 75 is a green light for altseason. Currently, the index stands at 78.

4. Trading volumes in altcoin-stablecoin pairs

An increase in trading volumes in pairs against USDT and USDC indicates real liquidity inflow, not just speculative movements.

5. Social media trends and retail behavior

A surge in mentions of altcoins on social networks, hype around specific coins — these are lagging indicators, but they still reveal market sentiment.

Four phases of altseason: how capital moves

Altseason rarely happens suddenly. It passes through clear stages:

Phase 1: Bitcoin dominates

Capital concentrates in Bitcoin. Its dominance grows, BTC trading volumes are high, and altcoins are dormant.

Phase 2: Ethereum comes alive

Liquidity begins to flow into Ethereum. This is a signal — the market is ready to look beyond Bitcoin. DeFi activity increases, Layer-2 networks are bustling.

Phase 3: Major altcoins take off

Attention shifts to established projects — Solana, Cardano, Polygon. They start growing in double digits. This indicates that the market is well ahead of the initial phase.

Phase 4: Small and micro-cap surges

The final stage. Small altcoins, memecoins, and speculative projects enter the scene. Bitcoin’s dominance drops below 40%. Parabolic rises begin to occur.

Ethereum as the engine of altseason

Ethereum often acts as the trigger for altseason. Leading analysts predict that Ethereum’s momentum will determine the performance of altcoins in the coming months. There are several reasons:

• Ethereum is the platform hosting thousands of DeFi protocols
• When Ethereum grows, the entire decentralized finance sector expands
• Institutional investors entering crypto via Bitcoin ETFs often diversify through Ethereum
• Projects based on Ethereum (and competing Layer-1 blockchains) attract a wave of interest

Drivers of modern altseason

AI and Machine Learning in crypto

Tokens of projects integrating artificial intelligence (Render, Akash Network) have shown growth exceeding 1000%. Demand for AI solutions in blockchain is a real trend, not just hype.

GameFi is reborn

Blockchain games like ImmutableX (IMX) and Ronin (RON) experienced a second birth. This attracts both gamers and traders.

Memecoins evolve

Memecoins are no longer just jokes. They incorporate utilities, AI, and create their own ecosystems. The Solana ecosystem grew by 945%, partly thanks to the memecoin renaissance.

Regulation as a catalyst and a killer

Recent months have shown how strongly regulation influences altseason. Approval of spot Bitcoin ETFs early in the year boosted institutional inflows. The potentially favorable stance of the US administration towards cryptocurrencies (as of November-December 2024) further encouraged the market.

Conversely, repressive regulatory measures (like in 2018 with ICOs) can instantly dampen altseason.

How to trade during altseason: key rules

Conduct research before buying

Don’t jump into every hyped altcoin. Study the team, technology, real project use cases. 90% of altcoins won’t survive the next bear market.

Diversify your portfolio

Don’t put all your funds into one altcoin. Spread investments across different projects and sectors — this reduces the risk of catastrophic losses.

Set realistic goals

Altseason can be profitable, but it’s not a path to instant wealth. The market is volatile, prices fluctuate, and a 10x today can crash tomorrow.

Manage risks like a pro

Use stop-loss orders, avoid excessive leverage. One bad move with 5x leverage can wipe out your entire capital.

Dangers of altseason

Volatility is extreme

Altcoins fluctuate two to three times more sharply than Bitcoin. In a week, gains of +200% or losses of -80% are possible.

Frenzy creates bubbles

When the entire market hype drives a coin, prices are artificially inflated. Then a 95% crash follows.

Rug pulls and scams

During altseason, developers often launch scam projects, raise funds, and disappear. Be extremely cautious.

Pump-and-dump schemes

Organized groups buy cheap altcoins, hype them up, then dump en masse — ordinary investors lose.

The global context at the end of 2024

The crypto market has reached a record capitalization of $3.2 trillion. Bitcoin approached the psychological mark of $100,000. All this indicates that conditions for altseason are maturing.

Key factors:

• Over 70 spot Bitcoin ETFs approved
• Regulatory clarity improves
• Institutional capital continues to flow in
• Crypto innovations accelerate
• Alternative blockchains (Solana, Polygon) prove their usefulness

All this points to a maturing market where conditions for a sustained altseason are being created before our eyes.

Monitoring indicators

To catch altseason without missing the entry point:

• Track Bitcoin dominance decline
• Watch ETH/BTC ratio
• Study the Altseason Index
• Analyze trading volumes of altcoin pairs against stablecoins
• Follow regulatory news
• Listen to social media discussions (this is a lagging but informative indicator)

Conclusion

Altseason is an exciting period for investors willing to ride the waves of volatility. Today’s altseason differs from previous ones: it is driven not only by speculation but also by real application of crypto technologies, ecosystem maturation, and serious capital inflows.

The key to success is staying informed, diversifying your portfolio, and strictly managing risks. Professional traders know: during altseason, it’s easy to make money but just as easy to lose everything. Choose your trading approach wisely.