What is Altcoin Season? A Guide to Using the Altcoin Season Index for Crypto Investments in 2026

Every now and then I notice folks missing what’s going on with the market. Money sits still, attention drifts somewhere else, yet changes unfold quietly all around them.

TL;DR: When Bitcoin rises, funds likely flow into different digital currencies. This movement marks what traders refer to as Altcoin season. The Altcoin Season Index measures whether top alternative coins outperform Bitcoin across a 90-day window. Your planning could hinge on spotting these shifts early.

What Is Altcoin Season? Definition, Characteristics, and History

Season for Altcoins - what's that really about? Funny thing is, even folks deep into cryptocurrency might mix up what it means.

Definition and Key Traits

Altcoin season is when speeds pick up beyond Bitcoin’s pace. Folks tend to call that moment altseason. For it to count, 75% of the leading fifty cryptos must outperform BTC over a three-month stretch.

Altcoin Seasons Over Time

Alt seasons over time

Late nights watching cryptocurrency charts showed repeating patterns. Following a strong rise in Bitcoin, activity slows while BTC moves sideways - soon after, Altcoins start gaining speed. This cycle tends to last between two and three months. If a distant relative messages you out of nowhere about digital assets seen in short online videos, it should be clear that the time for alternative coins has arrived.

Altcoin Season Index Tracks Market Cycles

Waking up, the first thing I do? Stare at crypto indexes. Coffee can wait - need to see what happened overnight while the rest of the world was sleeping.

Definition and How It Works

What gives us the clue about Bitcoin leading or small coins stepping up? Look at the Altcoin Season Index - it shows the shift in a way that cuts through all the noise on crypto Twitter. You can use either CoinMarketCap or Blockchain Center to keep track of this:

When Bitcoin is in full swing (i.e. Altcoin Season Index sits at 0-25), most smaller coins struggle to keep up. This period usually favors the original coin above all else.

25-50: Moderate Bitcoin season

50-75: Moderate Altcoin season

75-100: Strong Altcoin season

The math is straight forward - count how many of the top fifty alternative coins do better than Bitcoin across ninety days. Turn that percentage into the index number. When only 15 out of 50 coins outperform Bitcoin, you get a reading around 30. This points straight to Bitcoin holding control. Now imagine forty passing Bitcoin instead. The gauge jumps to eighty. Altcoins are moving fast now.

Direction means more than numbers. When an index rises steadily - say, from thirty to forty-five in fourteen days - it hints at change. A climb like that often signals growing strength in alternative coins. But when numbers just drift, stuck between forty and fifty for months, nothing much is happening. That kind of stretch tests patience more than anything else.

Direction shows more than digits ever could. When the number climbs steady, like from thirty up to forty-five across fourteen days, something shifts beneath the surface. That kind of rise hints at energy gathering in smaller coins. But when it just jiggles - stuck near forty, then fifty, month after month - it feels flat. Movement without progress tends to wear people down.

When the number climbs above forty, that is where sharper players begin to move. Not after it reaches seventy-five. Momentum grows step by step. Social chatter lights up only once others catch on - often near eighty. That kind of delay tends to mean peak territory is close.

Why the Altcoin Season Index Can Be Misleading

When markets plunge, Altcoins usually fall faster than Bitcoin - even if the Altcoin Season Index suggests otherwise. Panic takes control once selling spirals out of hand. The tool, useful as it is, misses these moments of chaos. Everything gets overshadowed by the rush to exit.

When just a handful of big Altcoins move, the index often falters. A huge jump in Ethereum can twist data, even as little-known tokens keep dropping. Numbers may hover near 60 - seeming like altseason - but really, it's ETH plus perhaps two others pulling all the weight.

Truth lives outside rigid rules - watch how pieces fit together instead. When multiple signals align, like the index climbing while Bitcoin dominance breaks key levels, that's when positioning changes make sense. 

Altcoin Selection Framework

I follow a loose set of rules to pick out potential Altcoins to invest in.

Groupings and Performance of Various Sectors

Figuring out where gains often show up might shape how you spread investments. Not all alts move together - there's usually a sequence:

Sector rotation in Altseason

Layer-One Blockchains and Smart Contracts

What kicks off the early surge during Altcoin season usually starts here.

Lately, eyes turn toward Solana, then Avalanche, also some newer players stepping in. When gas prices on Ethereum spike, folks often look elsewhere as their patience runs thin.

DeFi Tokens

Mid-altseason often brings chaos to DeFi. As Layer 1 networks slow, lending apps start gaining speed. DEX activity also climbs. Momentum builds further with yield-focused tools.

NFT Games and Virtual Worlds

Halfway into a surge of alternative coins, certain sectors begin drawing attention. As digital ledgers blend with gaming, virtual assets pop on trading dashboards. 

Meme Coins and Community Driven Projects

Momentum late in altseason often boosts these coins. Coins like Dogecoin or Shiba Inu might run thin on substance, still they've blasted upward once fervor peaks.

Fundamental Analysis and Selection Criteria

What matters most? Not your timing. It's picking smarter options that shifts outcomes. Movement alone won't do it.

When I look at an investment, DVTLM guides my thinking - five parts matter most. Developers come first. Then volume shows activity levels. The team behind the project holds weight. Liquidity also gives clues about stability. A project's market cap overall rounds out the view.

Developers and Their Work

These days, I dig deep into every team’s digital footprint - GitHub activity, research team profiles, you name it. If I can’t confirm who's behind a project, I just move on.

What happens on GitHub shows more than words ever could. That one time I lost money? It went into a so-called game-changing DeFi project - endless tweets, zero code updates for half a year. These days, I watch for real progress in the repository, not surface tweaks meant to fake momentum. Believe it or not, plenty of trending ventures have ghosted dev teams behind the scenes, even as ads keep rolling.

Volume & Liquidity

One thing the FTX meltdown made clear: watching cash flow isn’t optional. Lately, I check trading volume before doing anything else when the market opens. Suppose my trade would take up more than a single percent of that day’s total movement - then I step back, regardless of how good the pattern appears.

Team Verification

Hidden in the world of digital money, some teams choose to remain unseen - true, Bitcoin pulled it off, but that path needs careful watching. I look hard at who stands behind these efforts, tracing hints through details others miss:

• Previous successful projects

• Verifiable work history

• Active GitHub contributions

• Conference appearances

• Developer community engagement

Liquidity Depth

What matters most isn’t just trading numbers. Look deeper - into how much is actually sitting on the buy and sell sides across big platforms.

Market Cap and Growth Potential

What a coin's total value tells us matters when looking at how much it might grow.

Investment Planning in Altcoin Seasons

Most folks stop after spotting a solid option, yet that’s merely the beginning. What follows trips up nearly everyone: deciding how much to buy, waiting for the right moment, and how long to hold steady until it’s time to exit.

Portfolio Allocations Shift As Markets Change

Shift your allocation by phase

Your portfolio strategy needs to keep you connected to the full market, yet highlights what might do better at every stage. Sure, that’s how it sounds on paper. Truth is, I occasionally let enthusiasm take over and put in too much.

What keeps a portfolio steady? Rebalancing. When Altcoins surge, their share of holdings often balloons fast. That kind of growth feels good - until it doesn’t. Too much weight in one area brings real danger.

Timing Exit Points

Greed taught me what exit plans are for. Back in 2021, big wins slipped away since I held too long. Now I make sure to sell pieces as things go up. When an investment doubles, I take out roughly one-fifth. If it triples, another part gets sold. Should it hit five times the starting price, well, more comes off the table then. It helps keep results steady.

System for Managing Risk

Handling Investment Scale and Protecting Portfolio Worth

The Three Tier Position Sizing Framework

A useful framework divides Altcoins into tiers:

Size positions by risk level

Some big names - ETH, SOL, LINK, AAVE - should fill no more than five to eight percent of any single spot. Holding that status means hitting a high market value, showing real-world function, backed by solid builders behind the scenes.

Putting too much into one mid-sized firm could backfire. A slice of just a few percent feels safer. Pause if tempted to push past 4% on any choice. That rule holds true even for DeFi setups in the middle range. A few fresh blockchains sit alongside big-name NFT projects already underway. Growth in users matters, so does having strong underlying structure.

Only a sliver ends up in tier 3 - somewhere between half and one percent. That space holds tiny companies chasing big ideas. Picture fresh blockchain designs, overlooked startups, or unproven tech experiments. Risk runs high here. Yet that same risk can open doors to dramatic gains.

Putting money into different areas lowers danger. Consider spreading it among digital currencies built for separate purposes, diverse technologies recommended.

Managing Stop Loss Levels in Crypto Trading

Frequent spikes in alternative coin trading tend to wreck older methods. Since everyday moves are just 1–2 percent, narrow stop points cause quick exits. Using a wider span might delay leaving too soon. That setup reduces losses when prices hop slightly back up.

Counterparty Risk Management

Truth is, getting your coins off exchanges helps. My two thousand in FTX gone, yes - tough but survivable. Others in our chat weren't so lucky. What looked solid broke overnight. Trust doesn't come easy anymore, especially when it involves letting other hands keep your money.

Emotions Influence Money Choices

When Altcoins start rising, tension climbs quick - reason often slips away. Fact remains: feelings steer decisions in crypto far more than any line of code.

Fear grips people when costs rise fast, drawing traders into risky moments. Protection comes from clear entry rules, especially ones not tied to recent price performance. Sometimes safety lies not in reacting, but in having a plan before things shift.

Some CoinMinutes guides come with a FOMO check. How pumped about certain projects folks seem today - that’s what we’re tracking here. Spotting spots heating up quicker than they should is part of it too.

Why CoinMinutes Exists

Back when our founder kept losing money, he started diving deep into charts. That messy journey sparked CoinMinutes. Fancy platforms? Not us. Just regular folks once obsessed with crypto numbers late into the night.

A fresh edition arrives every week, much like what you just read, mixed with a little something else:

• Early morning thoughts on markets - rough, unpolished, written while coffee kicks in

• Follow the cash, not the chatter from crypto personalities

• FOMO Check appears whenever excitement spikes around nonsense

• Security warnings

• Potential projects flying under the radar

You might be exactly those we write for if you made it this far - odd opinions included, usefulness hoped for.

Head over to https://coinminutes.com/ whenever it suits you - or ignore it, seriously, up to you. Those Friday emails we send though? They cost nothing. Hopefully we will see you there!