What is an Alt Season?

Alt Season has been a very used term in recent days by crypto Twitter and also by different mainstream media. The issue is that not everyone knows what an alt season is. This term would be very important for you as a trader and investor in the cryptocurrency market. Additionally, it would help you understand how the entire crypto market works and which type of investment cycles the crypto industry experiences over time. 

In the next sections, we would not only focus on giving the answer to “what is an alt season?” but we would also try sharing with you all the necessary information you should have about altcoins and digital currencies. 

Disclaimer: the information shared by AltSignals and its writers should not be considered financial advice. This is for educational purposes only. We are not responsible for any investment decision you make after reading this post. Never invest more than what you are able to lose. Always contact your professional financial advisor.

What are Altcoins?

Altcoins are alternative cryptocurrencies to Bitcoin that have different features and characteristics. Each of the altcoins released has a specific feature that would make it different from others. 

There are different reasons to release an altcoin. Some projects want to create utility tokens for users on their platform to use it. Some other projects released preferred to create a token to expand their services and simply to gather funds. 

The positive thing about altcoins is that some of them are very useful and innovative. For example, Ethereum (ETH) is the second-largest virtual currency in the world and it became the largest smart contract network in the world. 

It is also worth pointing out that altcoins have been speculative investments. Some of the massively grew and remained at high valuations, some others were simply scams. After a fast price increase to unexpected levels, the price of the token abruptly fell to almost zero. 

Therefore, it becomes very important to understand how altcoins behave and what could be the reason behind their growth and expansion. Failing to properly identify these things could result in very bad investment results. 

What is an Alt Season?

The introduction that we have made above lets us move to understanding what an AltSeason is. In the cryptocurrency market as in any other industry, there are bull and bear markets. That means that there are periods in which altcoins move higher and moments in which these altcoins move lower. 

Bull markets are very positive for investors as they will have the possibility to make profits by investing in selected currencies. The profits they make would highly depend on a large number of factors, however, it is highly possible that investing in the correct altcoins during a bull market would result in profits. 

This is what the market calls an AltSeason: a bull market for altcoins. During these markets, altcoins tend to grow faster and more than Bitcoin, generally speaking. Recognizing an altseason would be very important for investors as they would be able to make higher profits rather than holding Bitcoin.

It is also true that when an altseason starts, the virtual currencies that register the largest gains are usually smaller tokens that are not widely known by investors. Although they are riskier investments, they could be a great possibility for investors to diversify their portfolios with a small allocation.  

But of course, an altseason has an end. Usually, when an altseason finishes, we see digital currencies falling by over 80% in some cases. Indeed, some coins simply disappear after a bull trend. This is why it is highly important the timing in which you leave the market. If you do so correctly, you might have the chance to re-invest your profits in the future on those altcoins that are still in the market. 

Which Cryptocurrency To Buy?

This is a very difficult question to answer as there is no guide to investing in cryptocurrencies. Having a diversified portfolio is very important. Bitcoin, Ethereum and Litecoin are usually the most popular cryptocurrencies to invest in. However, if you want to make larger profits, there are other riskier digital currencies that could provide you with larger returns during an altseason.

We are talking about digital currencies that are well below the top 100 largest virtual currencies in the world and that could only be purchased in selected exchanges. These are very risky investments and it could result in your funds getting lost forever, as many of these coins might not survive.