BTC vs Altcoin Season: Key Crypto Cycle Differences

The power shift between Bitcoin and altcoins (any other coins other than Bitcoin) has deepened in the past years, as the first cryptocurrency gained more value and altcoins diversified. Each of these assets has contributed to the industry by offering an alternative to traditional finance (TradFi), from faster and cheaper transactions to blockchain transactions and decentralized infrastructures.

The second biggest cryptocurrency on the market, Ethereum, revolved around Bitcoin, given its similarities and differences. However, both coins are significantly important for the evolution of decentralized finance (DeFi). That’s why trading ETH/BTC helps users understand the economic outlook perspective on cryptocurrency, especially in light of the Fear and Greed Index. While the exchange rate ratio shows growth in demand and drives development, strong emotions is what drives the market still.

But besides their collaboration as exchanging assets, Bitcoin and Ethereum take turns in matters of price intensity in cyclical seasons, so let’s see what it’s about.

What is altcoin season?

Altcoin season, or alt season, represents a period in the crypto market where altcoin prices outperform Bitcoin. As market activity and trading volumes increase, development in decentralized applications and smart contract-based technologies also flourishes.

Altcoins dominate the market, which can offer investors and traders moments of massive gains, but volatility is higher than usual considering the nature of altcoins. This event could occur for several weeks to a few months, during which unique coins, such as meme coins or other cryptocurrencies, draw more investments than usual.

The signs of an upcoming altcoin season include the following:

• BTC experiences a breakout, followed by a price appreciation;
• ETH gains more momentum than BTC by taking market share;
• Social media and communities are more interested in altcoins;
• More development projects in cryptocurrency happen;

Altseason started when the combined market capitalization of cryptocurrencies overthrew Bitcoin, also leading to a spike in trading volumes.

Past altcoin season stats

Therefore, investors should look out for a prolonged period of BTC underperformance, which can be caused by economic downturns, inflation, and global crises.

On Bitcoin season

The Bitcoin season tends to be longer, and it happens when nothing can overthrow the cryptocurrency from the spotlight. At the same time, this is when altcoin projects stagnate, so investors turn to BTC again. Users hold onto Bitcoin for stability during market uncertainty as altcoins perform poorly.

The Bitcoin season is considered a normal occurrence in the crypto market, during which investors benefit from more security. However, returns are not that consistent, which is why users wait for the altcoin season to capitalize on crypto investments.

Taking advantage of each season means learning to diversify and being ready for unexpected market turns. Investing in altcoins with potential and future opportunities is a lucrative tip for managing volatility and price changes, but it’s also necessary to know when to enter and exit the market.

All about the four crypto seasons

The Bitcoin season and the altcoin season are important periods for investors and traders, but other intervals also contribute to the development of the industry, such as the following:

• The spring crypto season identifies a period of recovering from considerable lows, with little interest from investors in new projects;
• The summer crypto season usually happens after Bitcoin’s halving, starting a bull period where the coin’s prices are peaking;
• The fall crypto season attracts interest from the media and new investors, pushing for the bull run to end;
• The winter crypto season is a period of decline in which investors lock their gains and prices drop significantly;

These cycles have been consistent since the 2012 halving when the block reward was reduced by half. Halving events occur every four years and trigger a massive movement in the crypto industry, making it more difficult for miners to add new blocks. Although the halving is beneficial for investors and traders since it supports scarcity, mining becomes much more complex and pricier.

How can investors prepare for the changing seasons?

Every changing season in crypto brings a little bit of uncertainty and instability, whether we talk about the Bitcoin or altcoin season. The transition between prices intensifies when events like regulatory changes, technological developments, and market sentiment interfere.

Therefore, investors, traders, and all crypto participants must always be prepared to withstand changes in prices and trends in crypto so as not to be taken by surprise when the market booms or falls. Reading the news and learning how to interpret analysis based on technical and fundamental interpretations objectively is essential, as biases can considerably hinder making the right decisions.

What are biases in crypto?

Behavioral biases are prominent issues in the crypto market, as many users are not wary of them. Hence, they believe their decision-making process isn’t influenced by anything other than their interpretations, but there are the most common biases that affect investors:

• FOMO (fear of missing out) bias that compels people to join a trend to avoid missing out on a supposed opportunity;
• Confirmation bias means preferring the data that confirms pre-existing beliefs;
• The overconfidence bias shows how investors overestimate their skills versus the risks;
• The loss aversion bias makes users consider the heavier losses than the equal gains;

Final considerations

The Bitcoin and altcoin seasons showcase periods when each category’s market capitalization takes turns leading the market. When Bitcoin slows down in interest and new projects enter the market, the alt season starts and lasts up to a few months as Bitcoin underperforms. During these transitional times, investors must prepare to withstand volatility, the effects of changing regulations, and new market sentiments that affect prices.