Altcoin season refers to the period in the crypto market where altcoins experience rapid price increases and outperform Bitcoin in terms of returns. Currently gaining more than 6% on a daily basis, the leading crypto is outpacing altcoins in terms of performance. Which projects should be on the radar before a potential altcoin season, let’s answer…
What is altcoin season and when did it start according to historical data?
Altcoin season is a time when altcoins outperform Bitcoin in terms of price. During an alt season, altcoin prices often rise, sometimes even eclipsing Bitcoin’s gains.
This phenomenon is characterized by a shift in market sentiment as investors seek higher returns by investing in smaller, lesser-known cryptocurrencies with significant growth potential.
Altcoin seasons are typically marked by increased trading volumes, increased market activity, and an increase in the overall market capitalization of the crypto market. These periods are often accompanied by a sense of excitement and FOMO (Fear of Missing Out) among crypto investors trying to identify the next big winner among cryptos.
What triggers the altcoin season?
There are several reasons why altcoin seasons occur in the crypto market. One of the key factors is market sentiment and investor psychology. During an altcoin season, the appetite for risk increases, often among investors seeking higher returns.
Crypto investors may be willing to invest in smaller and riskier altcoins in hopes of catching the next big winner. This increased demand for altcoins could push their prices higher, resulting in an increase in their market capitalization and overall performance.
Another factor that can contribute to the altcoin season is the technological advances and innovations in the crypto space. As the crypto ecosystem evolves, new projects and technologies emerge that offer unique solutions and use cases. These innovations can attract the attention of investors and create excitement, leading to an increase in demand for related altcoins.
Additionally, the bull season can be affected by changes in market dynamics such as changes in trading volumes, liquidity and market sentiment towards Bitcoin. For example, during periods of low volatility or consolidation in the Bitcoin market, investors may look for alternative investment opportunities in altcoins that can boost their prices.
Altcoin projects to watch in 2023
Looking ahead to 2023, there are a few altcoins worth watching as potential candidates for the next altcoin season. Crypto market analysts have been keeping their expectations for altcoin season for weeks. The selections of Florence Muchai, one of the Cryptopolitan analysts, are as follows:
Injective (INJ)
Injective (INJ), a cryptocurrency focused on the financial sector, has seen a 14% increase in value over the past week. This price increase can be attributed to Injective’s anticipated release of the first Solana rollup for Cosmos, a Layer-2 solution that increases network throughput and reduces transaction fees.
The project provides a streamlined toolkit for the development of Web3 applications for finance. Additionally, it launched a $150 million ecosystem fund to accelerate the adoption of interoperable infrastructure for decentralized finance. Many notable organizations have invested in this venture, including billionaire entrepreneur Mark Cuban.
Curve DAO Token (CRV)
Automated market maker Curve Finance’s Curve DAO token (CRV) is up around 10%, likely due to its impressive performance in the first quarter of 2023. According to Blockworks, the platform handled $32.9 billion in exchange volume in Ethereum during the quarter.
CRV price rose 78% in the first quarter, which indicates that optimism has been building for some time. Recently, the CRV has gone up from $0.90 a week ago to about $1.05.
THORChain (RUNE)
The settlement layer THORChain (RUNE) also had a successful first quarter, which could explain the 12% price increase. The network reported a total volume of $1.22 billion and a 30% increase in liquidity. Additionally, it earned $1.92 million from liquidity fees.
THORchain is a Cosmos-based Blockchain protocol that can be used to trade Bitcoin and Ethereum on other networks. Projects associated with Cosmos may experience price increases due to the overall development of the ecosystem. One of them, RUNE, is now up to about $1.65 from $1.43 last week.
Enjin Coin (ENJ)
Enjin Coin (ENJ) rose 11% shortly after the announcement of the new Enjin Platform. The new platform for the game and NFT focused project will make it easier for game developers to create collectibles and tokens.
cryptocoin.comAs you follow, Enjin is also ending public access to NFT.io, a marketplace that powers its ecosystem. This week it climbed to $0.4334 from the $0.37 traded a week ago.
Chiliz (CHZ)
Chiliz (CHZ), an altcoin project focused on the sports and entertainment industries, has seen a nominal 10% increase as the public release of Chiliz 2.0 approaches. Chiliz 2.0 is an evolution of the original Chiliz Chain, enabling brands and sports franchises to create a Web3 ecosystem that facilitates enhanced fan engagement.
Chiliz’s new Blockchain is a fork of BSC and will eventually be compatible with Ethereum. CHZ price is capping these news with 8% weekly gains.
Pay attention to these when investing in altcoins
Altcoin season is a phenomenon in the crypto market that can offer significant investment opportunities for those willing to take higher risks in pursuit of potentially higher returns. Market sentiment, technological advances, and changes in market dynamics can all contribute to an altcoin season.
However, it is important to note that the crypto market is highly volatile and unpredictable, and investing in altcoins carries inherent risks. Before making any investment decision, it is essential to conduct thorough research, understand the fundamentals of projects, and consider factors such as market trends, regulatory developments and risk management strategies.
As with any investment, diversification and a long-term investment mindset are crucial. It is important to have a well-rounded portfolio that includes a variety of cryptocurrencies, including established cryptocurrencies such as Bitcoin and Ethereum, as well as carefully selected altcoins with growth potential.
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