Altcoin season sees an important paradigm shift in the cryptocurrency market: capital begins to flow en masse from Bitcoin (BTC) to altcoins such as Solana (SOL), opening up new opportunities for investors.
Is the altcoin season finally here?
The Altcoin Season Index reached 76 out of 100. This means that 78% of the top 50 altcoins are outperforming Bitcoin within 90 days. Technically, the Altseason is considered open when the index crosses 75. This phenomenon was last observed from late August to September 2022.
The market meets the conditions necessary for the start of the Altseason: altcoins such as Ordi (ORDI), Sei (SEI), Injective (INJ), Solana (SOL), and others are growing faster than BTC.
Top Cryptocurrencies to Watch
Coins from the Solana, ORDI, and SEI projects deserve special attention. SOL formed a local bottom on January 3 at $85. Since then, the altcoin has risen in price by 10% and settled above $95. ORDI and SEI rose in price by more than 2000% and 500%, respectively, in three months and updated their all-time high on January 3. Despite the slight correction, both coins retain the potential for further growth.
Ethereum (ETH) has increased its market share, which is currently accounting for it, according to CoinGecko. By comparison, Bitcoin controls 47.5% of the market. The fall in Bitcoin’s share below 50% indicates growing interest in altcoins.
Altcoin season has already become a hot topic of discussion in trading communities. One trader turned 1.5 SOL into $2 million in Silly Dragon (SILLY) tokens in 22 days.
Success stories like these fuel the hype around altcoins. However, investing in the cryptocurrency market requires competent risk management. Despite the fact that on-chain metrics and technical indicators confirm the start of the alt season, the crypto market remains extremely volatile and unpredictable.
What to look for when choosing an altcoin?
When choosing alts for trading, we recommend following the following indicators:
Market capitalization: if the project is now valued at a high price, then that’s not all: it’s worth paying attention to historical metrics – whether the market capitalization has fallen before. If so, then the demand for the token is reduced.
- The technology behind the project: The developers of hundreds of projects that have appeared recently do not come up with anything original; only a few solve real problems. Thus, to some people, Ethereum solves the difficulties that Bitcoin faces: it is more energy efficient, and it’s growing faster.
- Project Goals: A project with a clearly defined goal and implementation plan is a good sign.
- Study the project team: if it is anonymous, then this should at least alert you. In addition to the team and its leader, the project must have a strong community: the more it is featured in the media, the better for investors.
- Tokenomics: An equally important factor when choosing a coin is tokenomics. You need to find out how many coins are in circulation, how many more will be released, and when they will be released. For example, if only 10% of the total issue of a coin has been issued, then in the future, the release of new coins will put more pressure on the price than if the coin had 90% of the issue now issued.
