Understanding the difference between Bitcoin and altcoin seasons

Cryptocurrency market dynamics split into Bitcoin versus altcoins or all the other coins created as an alternative to the foremost asset. As the most valuable token in the industry, Bitcoin established itself as a reliable and strong cryptocurrency, but this also led to an increasing mining difficulty and a deficient transaction fee system.
Therefore, altcoins are cryptocurrencies whose features offer a better investment option for first-time users or developers because they’re easy to acquire and provide fast and cheap transactions. Most of these coins are backed by blockchains with innovative use cases, such as TRON, one of the fastest-growing public chains in the world. The price of Tron is what attracts users since it supports the expansion of an impressive decentralized environment that includes the Tron wallet, dApps, and a TRC20-based stablecoin.
Tron is one of the contributing altcoins to the growing industry, and the value of all altcoins can sometimes overthrow Bitcoins. These dynamics are known as seasons, so let’s understand their features and differences.
What is Bitcoin season?
The Bitcoin season is usually when altcoins are not performing well, and its dominance on the market showcases several events that lead to this moment. For example, there hasn’t been a new development across altcoin projects compared to Bitcoins. Back in 2024, when the launch of Bitcoin ETFs took the market by surprise, altcoins were far behind the token’s value.
A Bitcoin season usually takes longer than an altcoin season, as the coin’s price performance cycles include four different phases. The breakout, hype, correction, and accumulation steps in the cycle are followed by an increase in the value of altcoins, which comes with an addition of factors.
How does the altcoin season start?
The theory tells us that the altcoin season officially started when 75% of the best 50 altcoins outperformed Bitcoin within a period of three months. This triggers an altcoin dominance that becomes more obvious when Ethereum, the second-biggest cryptocurrency by market capitalization, outperforms Bitcoin.
But the main signs of an altcoin season include the following:
- Rising trading volumes that drive liquidity and price volatility;
- An index of the altcoin season of 75% and above;
- Coin price breakouts due to the significant upward momentum;
- Investors allocating more capital to altcoins, shifting the market sentiment;
How should investors benefit from the altcoins season?
Considering the altcoin season is not for the long term, investors must change their approach within a few months in the market to take advantage of the price shifts. For instance, the best thing to do is to diversify holdings by extensively researching all projects to ensure they can withstand the volatile dynamic for longer.
There are numerous types of coins with unique use cases and features, which is why diversification is easy. However, what’s challenging is assessing whether the project is safe or not since several have proven to become scams, especially when it comes to small exchanges like Thodex.
Besides diversification and research, investors must learn to time their entries and exit through technical tools like the relative strength index (RSI) to determine crypto market sentiments and monitor price trends.
What are the risks of investing during the altcoin season?
The altcoin season might showcase a period of considerable innovation, but it’s also the perfect occasion for fraudsters to take advantage of those less prepared for such a busy period. Pump-and-dump coins are common schemes happening around the altcoin season. When an altcoin’s price has seemingly increased in a short time, it might be a sign of good business, but it can lead to substantial losses if it’s being sold off too fast. At the same time, these projects tend to have overly aggressive marketing tactics.
There’s also the risk of buying at overvalued prices during the altcoin season due to market excitement and FOMO (fear of missing out). When investors are driven by the fear that they’ll miss an opportunity to acquire more value for their portfolios, they tend to buy or sell without a strategy. This movement can lead to an inflated altcoin price, which usually is followed by a considerable drop due to a correction.
Finally, the altcoin season is known for its extreme volatility. Some tokens, such as meme coins, are exposed to such dangers the moment they become popular because interest in their value can drop as fast as it started. Doge or Pepe were the coins that benefited from Elon Musk’s attention, driving prices upwards in a matter of hours, but their standard value came back shortly after.
Practicing safety and caution is always best
Regardless of your level of knowledge within the market or investment expectations, it’s always best to practice patience and take the next steps based on technical analysis, not bias or emotions.
There are several types of bias in investing that hinder success, such as the following:
- Representative bias happens when you make a decision based on a previous similar situation;
- The confirmation bias makes us favor information aligning with our existing beliefs;
- The endowment bias affects the way we evaluate our assets, usually through overvaluation;
- The disposition bias makes investors sell the assets performing well and ignore the others;
Usually, investors are easily influenced by others, which makes trends the dynamics that interfere with one’s strategy development the most. Rather than establishing an accurate method of allocating assets and adding what’s most beneficial for their portfolio, investors might follow the movements of big whales or prominent figures in the industry.
While being part of a community can help one develop skills and learn something new, following people’s investments is not an efficient way to ensure success because every user has different risk levels and goals.
What’s your strategy during both coin seasons?
The Bitcoin season is a period when the coin outperforms all altcoins considerably, whereas the altcoin season is the opposite. When technological developments arise and more crypto projects appear on the market, the altcoin’s power exceeds that of Bitcoin, meaning prices will also increase.
This is a profitable time to invest in a varied array of projects, but investors must not pursue projects based on sentiments and community movement but analyze their own chances and design a personalized investing strategy.