What is altcoin season

During the season of altcoins (cryptocurrencies – alternatives to bitcoin) you can earn, but for this you need to understand the reasons for what is happening, said Anton Bykov, senior analyst at Esperio. The expert explained to cryptonewsherald the features of this cycle.

According to him, the altcoin season is a phenomenon that follows the rise in the price of bitcoin to record highs, after which investors begin to take profits and invest in coins that have not yet had time to take part in the market rally.

Thus, the main condition for the season of altcoins is the big profit received during the growth of the main cryptocurrency, he specified.

“Everything is simple and in the spirit of a bubble here: investors invest in a super-risky asset (Bitcoin) often with borrowed capital, if the “bet works”, then this brings huge profits that can be withdrawn, but this would not be in the spirit of crypto traders who are ready for increased risk. As a result, the money is directed to a thoughtless purchase and further promotion of quotes of smaller coins, after which the money earned goes to other tokens, and so on until the bubble bursts, ”said the analyst.

He recalled the Luna cryptocurrency, specifying that it was destined to become the project, after the collapse of which in 2022, investors began to urgently withdraw money, while collapsing the rates of other digital coins.

“Of course, you can make money on this phenomenon, but you need to understand the reasons for what is happening and not deceive yourself, thinking that we are talking about investing in a decentralized future or something like that. All these conversations should be left to large coin holders who do not benefit from critical thinking from traders,” the expert said.

Speaking about the recipe for success in the altcoin season, Bykov emphasized that there is no need to become attached to any projects: buy coins when they are still expensive and sell them without hesitation when the market bubble starts to deflate.

At the beginning of this year, the cryptocurrency market became active, its capitalization exceeded $900 billion for the first time since November 2022. On the night of January 13, the bitcoin exchange rate exceeded $19,000. As Vladislav Antonov, a financial analyst at BitRiver, explained, bitcoin rose in price against the background of the growth of American stock markets and the weakening of the dollar.

Crypto experts interviewed by cryptonewsherald gave two scenarios for the development of the digital coin market in 2023: in a positive forecast, the cost of bitcoin could reach $21-25 thousand, in a negative one – $5-10 thousand.

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