What is an Altcoin season?
An altcoin season, or altseason, is a period when altcoins surge in value, surpassing Bitcoin in performance. An altcoin, or alternative coin, is a cryptocurrency that is not Bitcoin. Altseasons are usually driven by a shift in the liquidity of the crypto market.
Due to the bullish sentiments of the crypto market during pre-altseasons, investors tend to search for more profitable opportunities in the market, shifting their attention from Bitcoin (BTC) to other promising altcoins.
This shift in investors’ attention and interest often results in an increased flow of liquidity or money from Bitcoin to altcoins, causing their prices to rise, and their outperforming Bitcoin.
Conversely, Bitcoin season is a period when Bitcoin outperforms altcoins. Due to Bitcoin’s status as digital gold, investors tend to shift their focus from altcoins to Bitcoin, especially when the market is bearish, resulting in the prices of altcoins falling significantly.
Past Altcoin Seasons
2017 – 2018
The first altseason occurred between 2017 and 2018. Bitcoin’s market dominance dropped significantly during this period, falling from 87% to 32%. Conversely, altcoins rose in value. This surge was a result of the ICO boom.
An ICO, or Initial Coin Offering, is a fundraising method used by blockchain companies to finance their projects. A blockchain company often sells its tokens to investors in exchange for capital. The logic behind this was that these tokens’ prices would rise upon the project’s launch.
Notable ICOs launched during this period included Ethereum, Tron, and Polkadot. The ICO boom resulted in several altcoins reaching their all-time highs, including Ether (ETH), Ripple (XRP), and Litecoin (LTC). Conversely, Bitcoin experienced a significant decline, dropping from its peak price of over $20,000 to less than $6,000.
2020 – 2021
The next altseason occurred between 2020 and 2021. The opportunity to explore other aspects of blockchain technology was the main driver of this altseason. It was during this period decentralized finance (DeFi), non-fungible tokens (NFTs), and memecoins became popular.
According to DappRadar, approximately $189 billion was locked in DeFi protocols by the end of 2021, a 767% increase over 2020.
The NFT market also skyrocketed. According to Skyquestt, approximately $2.57 billion worth of NFT art was sold in 2021, up from $20 million in 2020, representing a 12,750% increase.
Memecoins were not left out, as meme tokens like Dogecoin (DOGE) and Shiba Inu (SHIB) gained significant popularity during this period.
All these significantly affected the altcoin market, causing it to rise from 30% to 62%. The crypto market also reached an all-time high of $3 trillion. On the other hand, Bitcoin dominance dropped, falling from 70% to 30%.
Signs That an Altcoin Season Has Started
Increase in Altcoin Dominance
One major sign that an altcoin season has started is the increase in altcoin dominance, which is the percentage of the total crypto market cap made up of altcoins.
It is calculated by subtracting Bitcoin dominance from 100%, that is: Altcoin dominance = 100% – Bitcoin dominance. You can get the Bitcoin dominance value in real-time by checking crypto aggregator sites like Coingecko and Coinmarketcap.
Rising Trading Volume
Trading volume is the total amount of a cryptocurrency that is traded (bought and sold) on a crypto exchange within a given time period. Due to the increase in the flow of liquidity from Bitcoin to altcoins, the trading volume of altcoins tends to increase during altseasons. Thus, an increase in the trading volume of altcoins is a good sign an altseason is about to begin.
Increase in Altcoin Season Index and Ethereum-to-Bitcoin Price Ratio (ETH/BTC)
The altcoin season index is a metric used to determine how well altcoins outperform Bitcoin over a 30-, 60-, or 90-day period. Its value can be reliably used to predict if an altseason has started.
If the altcoin season index is between 0 and 25, it indicates Bitcoin is dominating the crypto market. If it is between 25 and 75, it means the crypto market is experiencing a mixed performance.
If, however, the altcoin season index is between 75 and 100, it means altcoins are outperforming Bitcoins, indicating an altseason.
The ETH/BTC price ratio can also be used to determine an altseason. A rising ETH/BTC ratio means Ether (ETH) outperforms Bitcoin (BTC), a trigger that might lead to an altseason**.**
How to Benefit From an Altcoin Season?
Research and Diversify Your Portfolio
Though altseasons can be profitable, they can also be risky, as a trader or investor might end up purchasing an altcoin that performs poorly. That’s why it’s important you research before investing in any altcoin.
To begin your research, you can use website tools like Coinmarketcap and Coingecko to check the metrics of an altcoin, including its dominance, trading volume, and market cap.
While researching is important, do not forget an important aspect of investing—diversification. Diversifying your crypto portfolio is important as it helps mitigate the risks associated with the volatility of the crypto market.
Are you looking for the best platform that offers a variety of altcoins to help diversify your crypto portfolio? MEXC is your best deal.
In addition to being one of the best and most reliable cryptocurrency exchanges, here are some of the benefits of using MEXC:
Wide Range of Token
With over 3,000 tokens listed and new listings occurring almost daily, MEXC stands out from other cryptocurrency exchanges by offering the most cryptocurrency collections. Its efficient infrastructure and well-organized listing process allow it to list cryptocurrencies swiftly and early. Thus, investors can acquire lesser-known and emerging cryptocurrency tokens even before they are listed on other exchanges.
High Liquidity
Liquidity is a key feature of the MEXC exchange platform. According to industry reports, MEXC ranks highest in spot trading, having a spot trading depth of $3.11 billion. It also has a futures depth of over $9.1 billion, surpassing the total of major exchanges.
With its high liquidity and extremely low slippage, MEXC provides a favorable trading environment that allows traders to execute trades swiftly and efficiently. Little wonder, it is the crypto hub of more than 30 million users from over 170 countries.
Extremely Low Trading Fee
Another unique benefit of the MEXC crypto exchange is its extremely low trading fees. MEXC offers a 0.05% taker fee for spot trading and a 0.01% maker and 0.04% taker fee for futures trading. The result? Traders can maximize profits during altseasons.
Due to its exceptional services, MEXC has become the go-to crypto exchange for millions of users, achieving ground-breaking milestones.
To illustrate with examples, here are two of MEXC’s achievements this past year:
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Ranking among the top centralized exchanges (CEXs) for spot and derivative trading.
According to the data obtained from Token Insight, MEXC ranked 6th and 5th among CEXs for spot trading and derivative trading in 2024.
In fact, its derivative trading volume increased by 132.35%, more than twice its 2023 volume. This is quite remarkable, highlighting MEXC’s hgh liquidity, wide user base, and diverse crypto offerings that cater to the needs of all kinds of traders.
Thus, traders can easily buy cryptocurrencies, including memecoins, with minimal price slippage. MEXC also offers futures and margin trading options that allows traders to benefit from the price volatility of cryptocurrencies, including memecoins.
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Having the largest market share among CEXs.
Market share refers to the proportion of trading activity a cryptocurrency exchange has compared to other exchanges.
MEXC had the highest growth in market share among CEXs in 2024. According to a research data, MEXC’s market share rose by approximately 9% in 2024, the highest among CEXs.
This says a lot about MEXC’s trust and reputation. No wonder it is home to more than 30 million users from over 170 different countries.
How to Buy Altcoins on MEXC?
To buy an altcoin from MEXC, follow the steps outlined below:
- Create an account: Visit the MEXC website and click the “Sign Up” button. Make sure to enable two-factor authentication to secure your account.
- Deposit funds: You need to fund your account to purchase crypto on the MEXC platform. MEXC supports deposits in both cryptocurrencies and fiat currencies.
- Search for altcoins and place an order: To browse through a list of altcoins, visit the “Markets” section of the MEXC website. After selecting an altcoin, place an order.
Plan Your Entry and Exit
To maximize gains during an altseason, you need to know when to enter and leave the market. Technical analysis instruments like support and resistance levels and the relative strength index, can help determine entry and exit points.
Setting up stop-loss and take-profits levels is also a proactive step to minimizing loss.
Get New Altcoins Early
Nothing beats being early. To refine your investment strategy, consider participating in token presales. Visiting the MEXC website for new listings also allows you to purchase new altcoins before they are listed on other exchanges.
