1. Defining Altseason

Altseason—short for “altcoin season”—is a period in the cryptocurrency market when altcoins (all cryptocurrencies other than Bitcoin) significantly outperform Bitcoin in price gains.

While Bitcoin often leads the market’s overall direction, during altseason, smaller-cap coins can deliver exponential returns, attracting both seasoned traders and new investors.

2. The Altseason Flow: BTC → ETH → Alts

Altseason isn’t random—it tends to follow a predictable capital rotation pattern:

1. Bitcoin Breakout Phase
   

• Bull runs typically start with BTC dominance rising. Investors trust Bitcoin first in a new rally, viewing it as the most established asset.
  

• New money flows in, often from fiat or stablecoins, seeking Bitcoin’s relative safety.
  

2. Ethereum & Large-Cap Altcoins Phase
   

• As Bitcoin consolidates after strong gains, traders look for higher returns.
  

• Ethereum (ETH) and other large-cap altcoins (BNB, SOL, ADA) begin to gain momentum.
  

• ETH often benefits from DeFi, NFTs, and its role as a “base layer” for much of the crypto economy.
  

3. Mid- & Small-Cap Altcoin Explosion
   

• Once ETH rallies, capital flows into mid-cap and small-cap altcoins, where the potential for outsized returns is highest.
  

• This is when “altseason” truly ignites—lesser-known projects can see massive percentage gains, albeit with much higher risk.
  

3. Altseason Indicators & Indexes

Traders use various altseason indexes and altcoin season indicators to measure the market shift:

• Blockchain Center Altcoin Season Index
  A popular metric that declares “altseason” if 75% of the top 50 coins outperform Bitcoin over the last 90 days (blockchaincenter.net).
  

• BTC Dominance Chart
  When BTC dominance (its market share) drops, it often signals that capital is rotating into altcoins.
  

• ETH/BTC Trading Pair
  If Ethereum outperforms Bitcoin, it’s frequently a precursor to a broader alt rally.

4. Risks and Timing Challenges

• Cycles Can Be Short-Lived – The most explosive phases of altseason can last only a few weeks.
  

• Liquidity Risk – Smaller-cap alts can be thinly traded, leading to high volatility and slippage.
  

• Reversal Risk – Once Bitcoin resumes its next leg up, capital can flow back out of alts quickly.

5. How to Approach Altseason

• Start with Large-Caps – When rotation begins, large-cap altcoins tend to move first.
  

• Scale Into Smaller Projects – Only after momentum builds, and always with strict risk controls.
  

• Track Key Indicators – Monitor the Altcoin Season Index, BTC dominance, and ETH/BTC for confirmation.
  

• Take Profits Along the Way – Altseason gains can evaporate rapidly when sentiment shifts.

Final Thoughts

Altseason is more than a buzzword—it’s a recurring phase in the crypto market cycle that follows the natural rotation of capital from Bitcoin, to Ethereum, and finally into smaller altcoins.

While the rewards can be extraordinary, so can the risks. Understanding the indicators, timing, and flow of funds is essential to navigating this high-volatility chapter of the market.