Altseason: What is it and how to profit from it?

The cryptocurrency market periodically experiences cycles of activity and decline. Among them, the altcoin season phenomenon stands out— a period when alternative cryptocurrencies begin to show significant growth. For investors seeking opportunities beyond Bitcoin, understanding this phenomenon becomes critically important. From 2024 to 2026, the dynamics of altseason have changed considerably due to the development of the stablecoin market, institutional capital, and new technological innovations.

What Lies Behind the Altseason Phenomenon

Altseason refers to a period when the total market capitalization of altcoins grows faster than Bitcoin. This is not just a price surge— it’s a major redistribution of capital in the market. In early cycles, altseason was driven by investor rotation from Bitcoin into alternative projects during BTC price consolidation. However, the modern dynamics are more complex.

The key difference in the current stage is that trading volumes of altcoins against stablecoins (USDT, USDC) now play a crucial role. As Ki Yang Joo from CryptoQuant notes, this shift reflects organic market growth rather than speculative cycles. Increased liquidity of stablecoins has created new opportunities for investors to enter and exit positions, stimulating capital inflows into altcoins.

Altcoin season is often accompanied by a decrease in Bitcoin dominance, explosive growth in trading volumes, and increased retail investor interest. Unlike Bitcoin season, which focuses on dominance, during altseason capital moves toward technologically promising projects rather than seeking stability.

How the Altcoin Season Has Evolved

The path of altseason can be traced through several transformations. In early stages (2017–2018), altseason was driven by the ICO boom, when thousands of new tokens attracted speculative capital. During that time, Bitcoin’s dominance dropped from 87% to 32%, and the total crypto market cap grew from $30 billion to $600 billion within months.

In 2021, a second major event occurred. DeFi summer and the surge of interest in NFTs created entirely new growth vectors. Altcoin share increased from 30% to 62% of market cap. Ethereum and its ecosystem became the growth locomotive, attracting both institutional investors and retail participants simultaneously.

By 2023–2024, the picture changed again. New drivers emerged: cryptocurrencies based on AI (Render, Akash Network showed growth over 1000%), GameFi projects (ImmutableX, Ronin), and even meme coins gained a “second wind” thanks to utility integration. The Altseason Index from Blockchain Center rose to 78, indicating a full altseason.

What fundamentally changed? Previously, altseason was a short-lived phenomenon— activity spikes quickly transitioned into corrections. Now, thanks to stablecoins, spot ETFs on Bitcoin and Ethereum, and growing recognition of crypto assets, altseasons are becoming more sustainable and longer-lasting.

Bitcoin vs. Altcoins: Where to Find Opportunities?

During altseason, market attention shifts from Bitcoin to alternative cryptocurrencies. This shift is characterized by double-digit price increases and a sharp rise in trading activity. Against the backdrop of Bitcoin consolidation or slow growth, investors seek higher returns in other projects.

Bitcoin season, on the other hand, occurs when the BTC dominance index rises. During such periods, altcoins often lose value or stagnate. Investors prefer perceived safety of digital gold over the dynamic but risky segment of altcoins. Bear markets typically reinforce this preference for Bitcoin.

A key point: altseason is not opposite to Bitcoin growth. During healthy markets, both can grow, but altcoins often outpace in growth rate. This creates an opportunity window for experienced traders.

Key Indicators of Altseason Onset

Recognizing an altseason is crucial for successful trading. Several signals help identify its approach:

Bitcoin dominance decline. Traditionally, altseason begins when Bitcoin’s dominance drops below 50%. Historically, this has been one of the most reliable indicators. According to Rekt Capital, even Bitcoin consolidation in the $91,000–$100,000 range can create conditions for liquidity capture in altcoins.

ETH/BTC ratio. Rising Ethereum-to-Bitcoin price ratio often precedes rallies across a broad spectrum of altcoins. It serves as a barometer of altseason health. Ethereum, due to its role as a DeFi ecosystem hub, often leads other altcoins.

Altseason Index. The tool from Blockchain Center, tracking the performance of the top 50 altcoins, shows values above 75 during altseason. In 2024, this index remained steadily in that zone, confirming the presence of altseason.

Trading volumes of altcoin pairs. Increased volumes in altcoin-stablecoin pairs indicate growing market confidence. Especially relevant sectors include AI cryptocurrencies, meme coins, and GameFi. Recent movements of over 40% in DOGE, SHIB, BONK, PEPE reflect concentrated market interest.

Stablecoin liquidity. The presence of USDT, USDC, and other stablecoins directly affects investors’ ability to enter and exit alt positions. Growing liquidity is a fundamental aspect of modern altseason.

Four Phases of Altseason

Altseason rarely begins suddenly. It usually develops in several stages, each with its own characteristics:

Phase one: Bitcoin dominance. Capital concentrates in Bitcoin as a stable asset. BTC dominance rises, while altcoins stagnate. This is a preparatory stage when the market accumulates energy.

Phase two: Movement into Ethereum. Investors start diversifying portfolios, shifting into the second-largest asset. ETH/BTC ratio increases, activity in DeFi projects and Layer-2 solutions accelerates.

Phase three: Rally of major altcoins. Capital spreads into projects with established ecosystems— Solana, Cardano, Polygon. Double-digit gains are visible. The market begins to believe in the potential of alternative blockchains.

Phase four: Small-cap boom. At the peak of altseason, low-market-cap altcoins and speculative projects come into play. Bitcoin dominance drops below 40%. Parabolic moves generate the highest profits but also the largest losses.

Trading Strategies During Altseason: Practical Tips

Altseason offers unique opportunities but requires discipline. Here are some proven approaches:

Thorough project analysis. Don’t fall for hype. Study fundamental indicators: development team, technology, market potential. Projects with real utility (like Ethereum, Solana, AI projects) tend to show more sustainable growth.

Portfolio diversification. Don’t concentrate all capital in one altcoin. Distribute investments across different sectors (AI, GameFi, DeFi, Layer-2), risk levels. This reduces the risk of total loss.

Profit-taking. As noted by Doctor Profit, a well-known crypto analyst, regular profit-taking is key to preserving gains. Don’t wait for the maximum; sell in parts as the price rises, leaving some positions open.

Use of stop-losses. Set exit points to limit losses if the market turns. In volatile alt markets, this is critically important.

Avoid excessive leverage. Margin trading can multiply profits but also lead to liquidation within hours. During altseason, when volatility is high, margin trading is especially risky.

Risks of Altseason to Be Aware Of

Altseason is not only about profits. Here are the main pitfalls:

Extreme volatility. Altcoins move 3–5 times more sharply than Bitcoin. Prices can drop 50% in a day, creating spreads and commissions on illiquid markets.

Speculation and bubbles. Excessive hype inflates prices artificially. When the bubble bursts, the decline can be catastrophic. Examples from 2018 and 2022 show how quickly rallies can turn into crashes.

Fraud. Rug pulls (developers fleeing with investments), pump-and-dump schemes, fake projects—these are real threats. Especially in meme coins and microcap sectors.

Regulatory blows. Unexpected regulatory statements can instantly wipe out tens of percent of market cap. Approval of spot Bitcoin ETFs in 2024 helped the market, but the opposite can happen.

Impact of Regulation on Altseason

Regulatory environment remains one of the key factors. Favorable rules stimulate altseason, unfavorable ones suppress it. Approval of spot ETFs on Bitcoin and Ethereum led to institutional capital inflows, creating a foundation for sustainable altseason.

Conversely, regulatory crackdowns on ICOs in late 2018 or tightening rules for crypto exchanges in various countries have historically led to altseason collapses. A potentially favorable regulatory stance in some jurisdictions could become a catalyst for the next altseason wave.

Conclusion

Altseason is a recurring cycle in the cryptocurrency market that creates unique opportunities for informed investors. The key to success lies in monitoring indicators (Bitcoin dominance, ETH/BTC, trading volumes), diversifying portfolios, and strict risk management.

History shows that each altseason brings both rises and falls. Projects based on real technology and utility tend to demonstrate more sustainable growth. Speculative projects can quickly vanish. By staying attentive to market indicators and maintaining discipline in risk management, traders can maximize gains during altseason periods while avoiding the most dangerous pitfalls.