“Alt Season” is the part of the overarching cryptocurrency market cycle where many altcoins “moon” (go up quickly in price) against the dollar and Bitcoin at once (for example, late December 2017 – early January 2018).
In general, altcoins tend to be in a perpetual state of bearishness or stagnation, either hovering in price or going down. Then, once in a while, an alt or two will catch an uptrend or epic run (generally a pump). However, every so often (like once or twice a year if we are lucky) all alts will “moon” at once or in quick succession for an extended period (for example a week, a few weeks, or even a month or two).
This period in which all altcoins are running together is sometimes called alt season by cryptocurrency traders/investors on social media.
When alt season occurs altcoins tend to outperform Bitcoin and the Dollar. If you are looking for early signs of alt season, look to the price action of the top alts like Ripple and Ether (subject to change). You can also generally look for a divergence in the market cap of Bitcoin and alts, and you can also look at BTC market dominance trends. Check out the image below for one way of detecting and better understanding all season.
In the chart below, you can see that during alt season not only is the total cap of crypto going up, but altcoin growth is generally outpacing Bitcoin. On the other end of this, we have what one might call “salt season.” This is when not only is the whole market going down, but alts are going down faster than BTC.
In general one wants to be out of crypto or in BTC rather than alts if it isn’t alt season. That said, alt season can come on quick, and trading alts can be profitable in any season, so you’ll find plenty of people in alts during the off-season too. Just try not to FOMO into the top and HODL into salt season, because that can sting. 😉
TIP: Outside of “alt season” most alts can lose amazing amounts of value (either because Bitcoin goes up or because everything is in a bear cycle). So while going “long” in alts can make sense, you typically want to avoid going all-in at the height of alt season and holding. 1,000% gains are real, but so are 90% losses. The alt market is not for the faint of heart.