How to Recognize and Trade During Altcoin Season 2023-2024?

Cryptocurrency markets are never quiet. They pulse through cycles of fluctuation, with periods of investor excitement and others of silence. Currently, the crypto world is at a pivotal point — Bitcoin (BTC) is trading at $87,050 with a market share of 54.91%, while the total market capitalization exceeds 2 quadrillion USD. These signs indicate one thing: Altcoin Season is on the verge of beginning, and this is the time when altcoins will outperform Bitcoin in price appreciation.

What Is True Altcoin Season?

Altcoin Season 2023 is not a new concept, but to understand it clearly, we need to grasp its essence. It refers to periods in the market when cryptocurrencies other than Bitcoin (not Bitcoin) start to increase in value more strongly than Bitcoin. During these times, capital shifts from BTC to promising altcoins, causing their market caps to surpass others. Investor psychology shifts — instead of focusing solely on the “digital gold” Bitcoin, they begin hunting for profit opportunities in emerging projects.

The Difference Between Altcoin Season and Bitcoin Season

In Bitcoin Season, Bitcoin dominates the market. The Bitcoin dominance index (measuring BTC market cap against the entire market) rises, indicating investors favor BTC over everything else. This is a period when risk-averse investors seek safe havens, or when a bear market (bear market) engulfs the industry.

Conversely, Altcoin Season occurs when Bitcoin dominance drops sharply, often below 50%. At this time, new projects are developed, new altcoins are launched, and trading volume on these coins surges. It’s a period when investors shift from conservative investments to higher-risk, higher-yield opportunities.

Historical Instances of Past Altcoin Seasons

Altcoin cycles do not appear randomly. They are often linked to major events or technological breakthroughs.

Late 2017 - Early 2018: Bitcoin dominance fell from 87% to just 32%. During this period, total crypto market cap soared from $30 billion to over $600 billion. The ICO (Initial Coin Offering) frenzy erupted, new projects flooded the market, and many altcoins hit all-time highs (ATH).

2021: This was the golden year of Altcoin Season. Bitcoin dominance dropped from 70% to 38%, while altcoins increased their market share from 30% to 62%. DeFi, NFT projects, and even memecoins like Dogecoin and Shiba Inu recorded enormous gains. Bitcoin reached $69,000, with total market cap surpassing $3 quadrillion USD.

Q4 2023 to present: Optimism was sparked by expectations of Bitcoin halving in April 2024 and the potential approval of Ethereum ETF. Capital began flowing into new sectors like AI, GameFi, metaverse, DePIN, and Web3. Altcoins such as Arweave, dogwifhat, and Worldcoin entered strong bullish cycles.

Warning Signs That Altcoin Season Is Starting

If you want to capitalize on Altcoin Season, you need to recognize these key indicators:

Bitcoin Dominance below 50%: This is a golden signal. When Bitcoin no longer accounts for over half of the market cap, it means investors are turning to other options.

Altcoin Dominance Rising Strongly: When the total market cap of all altcoins increases significantly relative to Bitcoin, it indicates capital is moving.

Altcoin Trading Volume Surging: When altcoin markets become lively with high trading volume, it’s a sign investors are actively participating.

Overall Positive Market Sentiment: When optimism covers the entire crypto space, it creates favorable conditions for altcoin growth.

Trigger Events: Approvals of ETFs, blockchain upgrades, or favorable regulations can spark an altcoin season.

Effective Altcoin Trading Strategies

Conduct Thorough Research Before Investing: Don’t get swept up in the hype without understanding the project. Review the development team, core technology, market potential, and long-term goals.

Diversify Your Investments: Never put all your funds into a single altcoin. Break your portfolio into multiple projects, balancing high-potential coins with more stable ones.

Set Realistic Expectations: Altcoin Season can bring profits, but not everyone gets rich quickly. Markets can be volatile, with prices changing rapidly. Prepare psychologically for both gains and losses.

Implement Strict Risk Management: Always set stop-loss orders (stop-loss) to protect your capital. Determine your maximum acceptable loss before entering a trade and stick to it.

Hidden Risks During Altcoin Season

Extreme Price Volatility: Altcoins are much more volatile than Bitcoin, potentially losing half their value in days. Additionally, the altcoin market is less liquid, leading to large bid-ask spreads.

Bubbles and Pump-and-Dump Schemes: Excessive hype around an altcoin can artificially inflate its price, creating a bubble that will burst later.

Frauds and Rug Pulls: Some projects may be scams from the start, with developers withdrawing support suddenly after raising funds. Pump-and-dump schemes are common, where a group artificially inflates prices then dumps, leaving retail investors with losses.

Regulatory Changes: Regulatory shifts can significantly impact the altcoin market. If major countries tighten controls, it could dampen the entire altcoin season.

Impact of Regulations on Altcoin Season

Regulations can be a double-edged sword. Strict rules may create uncertainty and dampen market sentiment — for example, the crackdown on ICOs in late 2018 cooled the altcoin boom at that time.

On the other hand, clear and positive regulations can stimulate growth. When countries provide a clear legal framework for cryptocurrencies or regulators express openness to blockchain technology, institutional investors are more willing to participate. A recent example is the SEC’s approval of a spot Bitcoin ETF, which encouraged significant institutional capital to enter the crypto market.

How to Start Trading Altcoins

To participate in Altcoin Season, you should:

1. Choose a Reputable Exchange: Gate.io is one of the leading platforms, offering over 800 cryptocurrencies and advanced security features. Select an exchange with diverse altcoin listings, user-friendly interface, and strong security measures.

2. Register an Account: Visit the platform, click “Register,” provide your email or phone number, set a password, and complete KYC verification.

3. Enable Two-Factor Authentication: Activate 2FA (2FA) on your account to enhance security.

4. Deposit Funds: The exchange allows deposits via cryptocurrencies or fiat currency. For crypto, go to “Assets,” select “Deposit,” and get your wallet address. For fiat, use available payment methods like credit cards or bank transfers.

5. Find and Buy Altcoins: Use the search bar to locate your desired altcoin. Choose order type: market order (mua ngay với giá hiện tại) (buy immediately at current price) or limit order (đặt giá cụ thể) (set specific price). Enter amount and confirm.

6. Manage Your Assets: After purchase, your altcoins will be in your exchange wallet. You can hold them there, trade for other coins, or withdraw to a personal wallet.

7. Stay Updated: Cryptocurrency markets change rapidly. Follow news, trends, and updates related to your holdings.

Ethereum and Other Current Altcoins

Ethereum (ETH) is currently trading at $2,920, making it the second-largest altcoin. Besides Ethereum, thousands of other altcoins are waiting for their moment. Each has its own story — some focus on DeFi, others on NFTs, gaming, or AI. Your task is to identify projects with solid fundamentals and growth potential.

Conclusion: Seize the Moment of Altcoin Season 2023-2024

Altcoin Season offers opportunities but also comes with risks. Success depends not on quick riches but on patience, thorough research, and strict risk management. By staying informed, diversifying your portfolio, and following proven strategies, you can maximize profits during this phase. Remember, the crypto market is always full of surprises, but well-prepared investors will be ready to embrace them.