Alt Season – What to Look Out for and How to Play it

Reading Time: 3 minutes
  • Alt season is like Christmas time for crypto traders, but it can be an overwhelming period
  • Alt coin cycles have a set pattern than plays out time and time again
  • We run through the essentials for making the most of alt season

Alt season is like Christmas time in the crypto space, where everything seems to go up forever. At times you can throw a dart at a dartboard of alts and make money where it lands, but this belies the truth. There is a pattern to alt seasons, and it’s important not to ignore the clues as to which way the wind is blowing if you don’t want to end up being the one who loses out while everyone else is winning.

Alt Season Comes After a Bitcoin Run

A true alt season only appears on the back of a Bitcoin run – and the bigger the better. The biggest alt seasons have come in January 2017 (after a two-year Bitcoin runup) and in late 2017 (after bitcoin had gone 20x in nine months).

The reason for this is simple – all the money made in Bitcoin flows into alt coins so that gains can be compounded. This can also be seen from the Bitcoin dominance chart, where we can clearly see that alt seasons (the red candles) occur after Bitcoin dominance has made serious gains:

alt season start

Big Caps Move First

In a typical alt season, big cap coins tend to move first before the profits trickle down, which represents something like the top 20 coins. This explains why the likes of ETH and LTC have done particularly well during this most recent first spell of the alt season, which saw ETH cross $1,000.

Once traders have rinsed these top coins for as much profit as they can, they will move into the 20-50 range and then onto the low cap coins. Of course once you leave the top 20 and especially the top 50 there is an overwhelming amount of coins to choose from, so picking the mid and low caps that will get the three-figure pumps is very difficult to do, which is why many dip out of alt season after the mid caps have run.

Nothing Lasts Forever

Alt seasons may feel like a dream, but like any dream you will wake up at some point. A mooning alt coin may seem like it will go up forever but it will stop – and when it stops it will crash hard. As we have said before, you should always go into a trade knowing your exit points and you shouldn’t deviate in order to chase a pump. By all means keep a moon bag after your target is met, but have an exit point in mind for this too.

Alt seasons are short bursts of profit as alts catch up and you should treat them as such – get in, make profit, get out. You can tell when an alt season has come to an end in two ways – the top 50 coins and many below have already pumped a serious amount, and the Bitcoin dominance is starting to reverse:

alt season end

A steadily increasing Bitcoin dominance trend has led to the probability that alt seasons will get shorter and less violent, so make sure you have your eye on the Bitcoin dominance ball as alt season rolls on.

Put Profits in Bitcoin

Something that often gets forgotten is where to put alt season profits. Of course you should secure profits at the appropriate time and cash out if needed, but don’t forget that the reason alts are pushing is because Bitcoin is falling. As the above chart shows, Bitcoin doesn’t crash forever just as alts don’t go up forever. Therefore, putting the bulk of your profits into Bitcoin is the best way of making sure you are ready for the next Bitcoin cycles.

Cut Out the Noise

A proper rip snorting alt season doesn’t come along often, and it can be overwhelming knowing where to put your money when everything is shooting up. This is where reducing your portfolio to a few alts and setting your sells the moment you buy can help you eliminate the noise. Plus, while those are going up you can be preparing where to put your profits rather than worrying about missing out.