When altcoins start outrunning Bitcoin (BTC -7.12%) for weeks on end, excitement rises, stories of winning riches overnight multiply, and the fear of missing out (FOMO) quietly reaches for your wallet. These "altcoin seasons," or "alt seasons," are among the most thrilling times to be a cryptocurrency investor, yet they're also among the riskiest.
Alt seasons tend to arrive after Bitcoin finishes making one of its bigger moves, which only happen once every few years. When they occur, they only last a few months at the most.
That means if alt season is arriving soon, and it probably will, you will need to be prepared in advance if you want to profit. Here are three moves to make right now to ensure you capture upside without losing the plot.
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1. Keep perspective, even when it gets hard
Altcoin season is typically defined by altcoins like Ethereum (ETH -10.74%) and Solana (SOL -12.24%) outpacing Bitcoin during a period of roughly 90 days, which almost always occurs a year or so after Bitcoin's halving (when rewards for mining coins are cut in half); one popular yardstick calls an alt season when 75% of the top 50 coins by market cap beat Bitcoin during that window. Despite this relatively clear definition, many crypto investors have a habit of wishfully saying that there's an impending alt season. So the first thing you need to do here is step back and pay attention to the data, not the chatter.
But why are investors so eager when it comes to believing in an imminent alt season?
In short, because it's the period when altcoins see their prices rise sharply or meteorically, and some even go to the moon. For anyone holding altcoins that are underwater -- which is to say, most investors in most altcoins -- alt seasons are when there's hope of getting a return for the first time in what could be years of holding. Don't let that delude you.
No matter how aggressively your coins pump during an alt season, their gains are all but guaranteed to vanish when the special period ends.
Quality investments will show largely the same pattern as the worst of the bunch, even if they end up being worth more on an sustained basis when the mania ends. So, you need to understand more than ever not to confuse a coin's price action with its odds of generating long-term value or its investment thesis; during alt seasons, the powerful upward movement of prices makes it all too easy to get these concepts scrambled in your mind, and the consequences can be severe.
2. Tighten your risk tolerance substantially
Alt season is when your investing discipline gets tested.
Liquidity can vanish, and declines hit alts much harder than Bitcoin, particularly when macro conditions flip. Whereas Bitcoin's liquidity tends to be more resilient, altcoins have historically suffered much more liquidity stress in sell-offs.
So write your rules now. Commit to reducing your purchasing of riskier crypto assets during alt season because it's when prices will be the least favorable, and it's possible that your coins will never revisit the (high) price you paid for them. Set strict position limits for the riskiest assets, or avoid them altogether.
Be especially sober with meme coins, or preferably, abstain altogether. Dogecoin can and likely will sprint during the market's euphoric phases, but there's no long-term thesis for holding it, and it isn't worth the folly of trying to time the market.
On the other end of the spectrum, be aware that even promising emerging names with real value deserve caution. Alt seasons are crucibles that separate the chaff from the valuable coins that will be around for the next few years and beyond, but the separation process is only clear in retrospect, when the dust has settled and the losers have gone the way of the dodo. It's safest to constrain your purchases to the biggest established winners of the bunch, like Solana and Ethereum or their similarly sized peers.
The takeaway is that alt season is when your risk budget should temporarily shrink, not expand.
3. Offload your losers and fragile winners promptly
If you have been nursing underwater or weak altcoin positions from prior market cycles, alt season is a gift. You will get a somewhat more favorable price to sell -- and it will likely be your only real chance to sell at those prices for years. So do the diligence of vetting your holdings and determine which you still believe in, and which you would like to get rid of once there's an opportunity.
Here's a practical approach. First, map your cost basis and set staged sales -- for example, at +25%, +50%, and +100% from your cost. Second, recycle the proceeds into higher-conviction assets like Bitcoin, Ethereum, or Solana. Third, keep a residual position if your thesis is intact, but accept that many altcoins never revisit prior cyclical highs; treat price spikes as exit ramps rather than fresh invitations.
In other words, use the season to repair portfolios, not to abandon your process. The goal is to emerge with more of what compounds over time and less that relies on perfect timing (which isn't attainable) to break even.
