Altseason Index: A Complete Guide to Trading Altcoins During a Bull Market

Altseason is one of the most anticipated periods for crypto investors, when altcoins demonstrate impressive gains in value. However, not everyone understands how to correctly identify the start of this period and use the altseason index to maximize profits. As of December 2024, the market has entered a phase reminiscent of conditions preceding a major altcoin movement, especially after Bitcoin’s fourth halving and the approval of spot ETFs.

What drives the altcoin market in 2024-2025?

The cryptocurrency market is constantly evolving, and the factors that determine altseason are no longer the same as five or ten years ago. The key difference in the modern era is the role of stablecoin liquidity and institutional capital. CryptoQuant analysts note that whereas previously capital simply rotated from Bitcoin into altcoins, now the picture is much more complex — trading volumes of altcoins in stablecoin pairs (USDT, USDC) have become a primary indicator of real demand rather than speculative spikes.

Additionally, the approval of spot Bitcoin and Ethereum ETFs has significantly expanded institutional investors’ access to the crypto market. Over 70 spot Bitcoin ETFs were approved in 2024, indicating growing trust from traditional finance in crypto assets. This trend has created favorable conditions for a broader altseason, which could encompass not only DeFi and NFTs but also emerging sectors like AI crypto projects and GameFi.

Stages of liquidity flow: how altseason develops

Each altseason passes through four clearly distinguishable phases, which can be tracked through Bitcoin dominance changes and Ethereum behavior.

Phase 1: Consolidation around Bitcoin

Initially, investors seek safety and pour capital into Bitcoin. The BTC dominance index rises, trading volumes increase, while altcoins remain stagnant. This is a accumulation period, laying the groundwork for future movement.

Phase 2: Ethereum enters the scene

When Bitcoin consolidates within a narrow range (such as between $91,000 and $100,000), liquidity begins shifting to Ethereum. Interest in DeFi projects and Layer-2 solutions grows. The ETH/BTC ratio serves as an excellent indicator of this transition.

Phase 3: Major altcoins attract attention

At this stage, the market begins valuing Solana, Cardano, Polygon, and other established ecosystems. Projects with their own ecosystems demonstrate double-digit gains, attracting increasing speculative capital.

Phase 4: Full altseason

The altseason index crosses the psychological level of 75 points, indicating that most of the top 50 altcoins are outperforming Bitcoin. Bitcoin dominance drops below 40%, and smaller altcoins show parabolic growth. During this period, meme coins, AI tokens, and experimental projects can increase by hundreds of percent.

How to use the altseason index for trading

The altseason index, developed by Blockchain Center, has become a standard tool for assessing the state of the altcoin market. This tool measures the performance of the top 50 altcoins relative to Bitcoin and provides clear signals:

• Above 75 = full-blown altseason, most altcoins are rising
• 50-75 = transition period, selective growth of certain altcoins
• Below 50 = Bitcoin season, altcoins lag or decline

As of December 2024, the altseason index has reached 78, indicating that the market is already in an active altseason zone. This is also confirmed by Bitcoin’s decreasing dominance, which has fallen significantly in recent months.

What signals precede an altseason?

Experienced traders and analysts monitor several key indicators that help determine when an altseason is near:

1. Drop in Bitcoin dominance index

Historically, altseasons often began when Bitcoin dominance sharply fell below 50%. This signals that investors are shifting funds from Bitcoin into altcoins. Rekt Capital, a well-known crypto analyst, emphasizes that Bitcoin consolidation in the $91,000-$100,000 range creates ideal conditions for such capital flows.

2. Growth of ETH/BTC ratio

When Ethereum’s price starts rising faster than Bitcoin’s, it often indicates that an altseason is imminent. Ethereum, as the second-largest crypto asset with a developed DeFi ecosystem, frequently acts as a catalyst for a broader altcoin rally.

3. Surge in trading volumes in altcoin-stablecoin pairs

An increase in trading volumes in USDT and USDC pairs with altcoins points to real capital inflow. K33 Research noted that recent sectoral gains of over 40% in meme coins (DOGE, SHIB, BONK, PEPE, WIF) highlight the potential for a large-scale altseason.

4. Activity on social media and trends

When specific altcoins start trending on social media, hashtags gain popularity, and crypto influencers become active — this often coincides with the start of an altseason. However, it’s important to distinguish organic interest from artificial hype.

5. Altseason index rising above 75

This is the most reliable indicator. When the Blockchain Center’s altseason index exceeds 75 points, the probability that you are in a full altseason exceeds 90%.

Historical altseasons and lessons learned

Each altseason leaves its mark on market history and teaches investors valuable lessons.

2017-2018: The ICO era

This was the first full-fledged altseason. Bitcoin dominance fell from 87% to just 32%. The ICO boom led to hundreds of new tokens, almost all attracting speculative capital. The total crypto market cap grew from $30 billion to $600 billion.

However, this altseason ended abruptly: regulatory pressure and failed projects caused most ICOs to collapse. Only projects with real utility, like Ethereum, survived.

2021: DeFi and NFT revolution

Bitcoin dominance dropped from 70% to 38%, while the altcoin share rose from 30% to 62%. This altseason was driven not by speculation on new tokens but by real development in decentralized finance (DeFi) and non-fungible tokens (NFTs).

Projects built on Ethereum, Solana, and other platforms offered tangible use cases. By late 2021, the total crypto market cap reached a record $3 trillion. This period demonstrated that altseasons based on technological innovation are more sustainable.

2023-2024: Sector diversification

This period was characterized by an altseason covering multiple sectors simultaneously:

AI crypto projects: Tokens like Render (RNDR) and Akash Network (AKT) surged over 1000% amid rising demand for AI-based computing solutions.

GameFi: Platforms like ImmutableX (IMX) and Ronin (RON) attracted gamers and investors, creating blockchain gaming ecosystems.

Utility meme coins: Projects like SnailBrook began integrating AI, moving beyond pure memes.

Expansion on Solana: The Solana ecosystem grew by 945%, overcoming its “dead chain” reputation and becoming a hub for meme coins and experimental projects.

This altseason was notable because altcoins developed based on real applications rather than hype alone.

How to distinguish Bitcoin season from altseason?

It’s important to understand that not everything rises at once. There are periods when Bitcoin dominates, and altcoins lag behind.

In Bitcoin season:

• Bitcoin dominance index rises above 60%
• ETH/BTC falls
• Altcoins stagnate or decline
• Investors seek “digital gold” for safety
• In bear markets, altcoins tend to fall harder

In altseason:

• Bitcoin dominance drops below 50%
• ETH/BTC rises
• Altseason index exceeds 75
• Trading volumes in altcoin-stablecoin pairs increase
• Projects with strong utility show double-digit gains

How to trade altcoins effectively?

Knowing when altseason occurs, you need to understand how to maximize profits and minimize risks.

Conduct research

Before investing, study the project: team, technology, community. Just because a token is rising doesn’t mean it’s a good investment. Many projects that surged 1000% soon became worthless.

Diversify your portfolio

Don’t put all your funds into one altcoin. Spread investments across several promising projects in different sectors — this reduces the risk of total loss if one project crashes.

Set realistic expectations

Altseason can be profitable, but it’s not instant wealth. Prices are volatile and can change rapidly. Expect double-digit returns, not guaranteed multipliers.

Use risk management strategies

Set stop-loss orders. If an altcoin drops 30% from your entry price, it’s a signal to reevaluate your position. Crypto trader Doctor Profit emphasizes: “Without proper risk management, profits can quickly turn into losses. Altseason is exciting but requires discipline.”

Take profits gradually

Don’t wait for the maximum. As your position grows, sell parts of your holdings. This protects you from sudden market corrections and locks in gains.

Risks and pitfalls of altseason

Altseason is not a guaranteed path to wealth. There are serious risks:

Extreme volatility

Altcoins are much more volatile than Bitcoin. A single day’s drop can wipe out weeks of gains. On illiquid markets, spreads can be huge.

Hype and artificial bubbles

Many altcoins inflate solely due to speculation. When hype fades, prices can crash catastrophically. Learn to distinguish real demand from bubbles.

Fraud and rug pulls

Some developers take investors’ money and disappear, leaving the token useless. Pump-and-dump schemes artificially inflate prices to sell at a profit later.

Regulatory shocks

Unexpected regulatory actions can instantly crash the market. For example, ICO bans in 2018 led to the collapse of most altcoins. Conversely, favorable decisions (like spot ETF approvals) can stimulate growth.

Excessive leverage

Margin trading can amplify profits but also losses. Many novice traders lose everything trading with leverage during altseason.

How to start trading altcoins on a reliable exchange?

Choosing the right platform is critical. Ensure the exchange is secure, offers a good selection of altcoins, and provides effective risk management tools.

Registration and verification

Sign up using email or phone, set a strong password, and complete KYC verification. This takes a few minutes.

Two-factor authentication

Enable 2FA to protect your account. It adds an extra layer of security.

Funding your account

You can deposit crypto (sending from another wallet) or fiat (via card or bank transfer). Availability depends on your region.

Finding and selecting an altcoin

Use the exchange’s search to find the desired altcoin by ticker or name. Review recent price trends, trading volumes, and project info.

Placing an order

Choose a market order (buy immediately at current price) or a limit order (set a specific price). Enter the amount and confirm.

Managing your position

After purchase, you can store your altcoins on the exchange, swap for others, earn passive income through staking programs, or withdraw to a personal wallet for added security.

How regulatory decisions influence altseason?

Regulatory clarity can both catalyze and suppress altseason.

Positive impact:

• Spot Bitcoin ETF approvals have brought institutional capital influx
• Favorable jurisdictions attract new projects
• Clear legal frameworks increase investor confidence

Negative impact:

• ICO bans (2018) caused altcoin market crashes
• Strict exchange requirements reduce liquidity
• Tax policies may cause investors to reevaluate positions

As of December 2024, the favorable stance towards cryptocurrencies in the upcoming US administration (with potential pro-crypto politicians returning) creates optimism and could extend the altseason into 2025 and beyond.

Conclusion: are you ready for altseason?

Altseason is a periodic phenomenon in the crypto market that offers opportunities for prepared investors. Studying the altseason index, understanding liquidity flows, and maintaining discipline in risk management are keys to success.

As of early 2025, all signs point to us being in an active altseason. The altseason index exceeds 75, Bitcoin dominance continues to decline, and new sectors (AI, GameFi, meme coins) show impressive growth.

However, remember: every altseason has a beginning, a peak, and an end. The main thing is to enter at the right moment, lock in profits, and avoid panic from hype. Conduct research, use the right tools, diversify your portfolio, and trade disciplined.

Altseason is not a cheat code for instant wealth but an opportunity for those willing to learn and follow risk management rules.