In the dynamics of investment asset markets, prices don't always go up
to provide "pleasure" to investors.
Prices usually experience fluctuations, stability, or sideways movement,
which is a certain indication of the market's psychology and overall investor interest
in an investment asset.
Clearly, all of this is triggered by market psychology that is naturally
"agreed upon" in responding to global sentiment, whether it be
economics, central banks, or other policies that directly or indirectly lead to
an investment asset.
Of course, the same thing also happens in the crypto market, which has
been very volatile due to the large amount of interests in each transaction
created, especially in daily and weekly timeframes.
Introduction
In the crypto market, to date, long-term price movements are still seen
as a strong rally that is a bullish sign. And of course, this usually happens
in all types of crypto assets such as Bitcoin and altcoins. What is interesting
in this crypto industry is the term called altseason, which refers to a certain
condition of altcoins. This is certainly one of the conditions that is eagerly
anticipated, especially when the market is experiencing a deep correction that
is concerning.
What is Altcoin?
Before discussing what altseason is, we need to first understand what is
meant by altcoin. In technical terms, altcoin refers to all crypto assets other
than Bitcoin. Since Bitcoin is the main crypto, altcoin is an alternative coin
to Bitcoin.
Over time, the number of altcoins has increased with various purposes
and visions behind the projects that support them, such as becoming a crypto
for managing a blockchain network like Ether (ETH), Solana (SOL), Cardano
(ADA), or a crypto focused on blockchain games and metaverse like Decentraland
(MANA), SandBox (SAND), and Axie Infinity (AXS).
Due to different visions and backgrounds, altcoins usually have their
own categories like some mentioned above, to make it easier for investors to
determine the investment sector they want.
For example, during the hype surrounding Ethereum's rival blockchains,
investors want to put their money in crypto related to blockchain like Solana,
Avalanche, and Cardano.
In the same way, when investors look at the decentralized finance (DeFi)
sector, they can put their money in related cryptos such as Chainlink (LINK),
Terra (LUNA), Aave (AAVE), and many more.
In short, altcoin is like a supermarket that provides a lot of goods
according to the interests and desires of investors.
Meanwhile, Bitcoin is only focused as a digital currency that is
expected to be an investment asset, a hedge, and a digital transaction tool.
Blockchain is the main player in this hope because of its innovative nature and
technology. This has been acknowledged by experts.
After understanding what altcoin is, then what is meant by altseason?
Does this also have anything to do with Bitcoin?
What is Altseason?
Altseason is short for altcoin season, which means it is a period when
altcoins experience a price increase that can be considered simultaneous, due
to an increase in trading volume, especially from investor buying activity.
Usually, altseason occurs after Bitcoin has experienced a strong price increase
first.
When the price movement of this main cryptocurrency begins to stabilize
and reduce its level of volatility, investors usually start looking for
"alternative" investments from Bitcoin to invest massively in.
The clearest sign of altseason is when Bitcoin starts to form some kind
of sideways movement or slow down after experiencing a strong rally.
After that, several major altcoins will start showing growth in their
price movements. The main altcoins referred to here are those with large market
capitalizations. As a reference, they would be in the top 10 of the largest
market capitalization cryptocurrencies on the CoinMarketCap list.
How to Utilize Altseason?
Based on the history of crypto assets, altseason is a golden opportunity
for investors to maximize their returns from investing in altcoins.
Why? It's because altseason is the beginning of a strong rally that
usually brings altcoins to new price levels, even all-time highs (ATH) due to
the high interest of investors entering the market.
The first way to take advantage of it is to diversify your crypto asset
portfolio.
This can be done during this period because when we invest in altcoins
in different sectors, it will provide attractive growth as everything is in
demand by investors.
Of course, attractive growth can be obtained in a relatively short
period because the market is highly active and will only begin all efforts to
increase prices in the next few weeks.
The second way to take advantage of altseason is by trading. If you're
brave enough to take risks, trading in the spot or margin markets can promise
instant and high percentage profits because the price tends to trend upwards.
Nevertheless, analytical skills are still necessary here to be able to
enter at the right point and still be able to determine good and healthy risk
management for potential profits and fund resilience in the long term. Many
people have been able to use altseason well and book very satisfactory profits.
However, understanding the background of the project and vision behind
the altcoin to be invested in is necessary so that we can assess whether this
will be valuable in the eyes of investors or not. Moreover, if you want to make
medium or long-term investments, understanding the value and potential of the
crypto asset to be invested in is very important to avoid hype.
The third way is, if you previously already have investments in one or
several potential altcoins but are trapped at a somewhat high price, then you
can increase your ownership stake in this altseason.
Usually, altseason will start when the crypto price is still below or
much lower than your initial buying position, so this is a buying step that is
usually taken to break even with previous investments (break-even point or BEP)
and even gain more profits.
From there, you can close all buying positions or only close the first
buying position to avoid price corrections. Although this is not entirely
risk-free, it is worth trying because it is still a good strategy to take full
advantage of altseason.
Choosing Potential Altcoins
Following the steps and advice above, it's a good idea to explore what
kind of altcoins are considered safe to invest in and which ones to avoid.
As widely reported, not all altcoin projects run smoothly, even some are
abandoned, or investors' money is embezzled, also known as rugpull.
There have been many cases where a project that seemed promising turned
out to be a rugpull, leaving investors with nothing.
Of course, we don't want to fall into such a predicament, so conducting
a little research beforehand is highly recommended.
Be cautious when entering a crypto asset that emerges due to hype. For
example, during the Dogecoin hype, many dog-themed meme tokens popped up, trying
to cash in on blind investor interest.
Although some of them are still growing and promising, there are several
that are actually scams and conduct rugpull practices.
It's better to invest in altcoin projects that have a good track record
and roadmap, even if we don't buy at their lowest price.
For beginners, it's recommended to only buy altcoins offered by
reputable and trustworthy crypto exchanges.
On trustworthy crypto exchanges, the altcoins offered have gone through
a rigorous selection process by experts who have assessed the feasibility and
potential of the projects behind them.
This can minimize the occurrence of scams, although no one can guarantee
its safety 100%. At least, this increases the percentage of your fund's
security and saves your time from waiting and investing in the wrong altcoin. [pc]
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