Have you heard the word Altseason in your crypto trading experience before? If you haven’t yet, then this article is just right for you.
This article will walk you through a general overview of the altseason so you’ll know what to do when it peaks. On the other hand, if you already know what it is, that’s okay because this article will also give you handy tips to do when the altseason hits.
Let’s begin!
What is the ‘Altseason’?
To understand the concept of altseason, let us first get a good grasp on what altcoin is. Altcoin literally means alternative coin. It refers to any other cryptocurrency aside from Bitcoin. Cryptocurrencies like Ethereum, Dogecoin, Litecoin, and many others fall under the category of an altcoin.
Now, what is the altseason, it literally refers to altcoin season, wherein during this season altcoins begin rising and hit their highest peak and together outperform Bitcoin. This season gives the traders a great chance at getting substantial gains from their spread out portfolios that contains multiple altcoins.
Expert traders diversify portfolios by getting their hands on different altcoins to mix with their Bitcoin investment. Experts do this to balance out the risks their portfolios has so when altseason hits they get the most unexpected profit out of their altcoin investments.
The altseason is like Christmas, it is a season that does not happen frequently. However, since it could bring substantial profit gains when it happens you need to know what to do to prepare when it does happen.
Tips to Make Profits During Altseasons
- Invest in altcoins
First things first, you cannot make profits from altseasons if Bitcoin is the only cryptocurrency you have. There is an extensive amount of cryptocurrency. Ranging up to 6,000 different cryptocurrencies in existence, you cannot just invest in all of it. However, you need to invest in a few. If you are investing hundred dollars a month in altcoins, the best option is to invest in not more than five altcoins. You must diversify your altcoin portfolio but it does not mean that you just randomly pick altcoins and put them on your portfolio. You must explore and research different types of cryptocurrencies. This will help you so you know which altcoins have the potential to peak and are worthy of an investment.
To have good options on what altcoins to invest in you need to be on a platform that offers a wide variety of altcoins. This is because you shall not mistakenly invest in a particular altcoin just because it is the only one available on your crypto exchange. Here is a list of cryptocurrency exchange and trade platforms that offers a wide variety of altcoins: Binance, Bitcoin Era, e-Toro, Coinbase, Kucoin, and Kraken.
You can also do a historical market analysis on the altcoin you are interested in so you know if it has any potential from a fundamental and data analysis. You should do this so you won’t only have risky altcoins on your portfolio. Since the sole purpose of diversifying is getting the risks of your investment spread out so you won’t get devastated by a total loss of investment.
- Understand Bitcoin dominance
What is Bitcoin dominance? It is a term to refer to the total market share that Bitcoin holds. The reason behind this terminology is due to the fact that Bitcoin is the leading cryptocurrency in market capitalisation and trading volume. It means that Bitcoin is dominant when people are buying and holding onto their Bitcoins and not selling them. This is when the market cap of Bitcoin spikes and negatively affects the altcoins’ market value.
On the other hand, when Bitcoin holders sell their Bitcoins, the value of Bitcoin drops and the altcoins surge and this is when altseason happens. When the market cap of altcoins skyrockets, this is when you should sell your altcoins. And you must do it before the others do so because if more people are just selling altcoins without buying them the prices will again drop. This is why you should learn how to read Bitcoin’s dominance. When you get a full understanding of this, you can unload first than the others so you get to sell your altcoins faster at higher prices.
- Get good trading tools
If you want to get higher chances at making a good profit in your cryptocurrency investment, you need to get your hands on great trading tools. Great trading tools can make your trading experience easier. However, great trading tools are expensive and you won’t be able to maximise them if you don’t know how to work them right. Although it is just hard work at the start when you get the hang of using these tools, your trading experience even getting into multiple trading positions will be easier.
On the positive side, there are crypto exchange platforms that can provide you with great trading tools. Some of these platforms are Gemini, Bitcoin Era, Binance, and Kraken. Users in these platforms can utilise the offered trading tools and trading bots to make the most out of their services. Using trading tools can help maximise your chance at profiting from altcoins most especially during the altseason.
Conclusion
Understanding what the altseason is, is a great bonus to have so you can have a better handle on the cryptocurrency market. Although it does not reflect profit for sure. You should know that profit gains can only happen when you enter the right trade positions and do not get too swayed by the market. This is why you should learn and understand how Bitcoin season and Altseason works. When you get a good grasp of the two you get to have higher chances at profit and you can take advantage of the crypto market to make profits.
Also, it is a way to make the most out of your altcoin investments since only having Bitcoins as an investment carries a much higher risk. However, investing in altcoins must be done after thorough market research is done so that you don’t put altcoins that will not bring you profit into your portfolio.
