Do you know what the altcoin season is? While most investors are waiting for this period, in fact, many do not fully understand how it works.

To put it briefly, altcoins consist of all cryptocurrencies except Bitcoin. Historically, Bitcoin came first, then others followed, which is why we call them "alternative." The market has well-known ones like ETH, Solana, Polygon, Dogecoin, but also hundreds of less-known tokens.

The main reason for the altcoin season is simple: when Bitcoin makes a strong rally, investors start taking profits and transfer this money to other tokens. That’s when altcoins rise much faster than Bitcoin. For example, in 2021, Gala increased by 10,891%, Axie Infinity by 10,598%. Some projects can really offer incredible returns.

So how do you understand this? Here, the Bitcoin dominance index comes into play. This index basically shows Bitcoin’s share of the total crypto market value. When the index drops below 50%, we can generally say that the altcoin season has started.

There is also an altcoin season index, which is a more practical measure. When the index exceeds 75%, it means that 75% of altcoins have performed better than Bitcoin in the last 90 days. If the value drops below 25%, money is flowing back into Bitcoin. There are dedicated sites to track these numbers.

What should you pay attention to when choosing altcoins? First, look at the market cap. A high price doesn’t mean the project is good. Check how it has behaved in the past. Also, look at the technology—has it really solved a problem? For example, Ethereum solved Bitcoin’s energy problem. Does the project have clear goals? Is the team anonymous? Is there a strong community?

Tokenomics is also important. How many tokens are in circulation, and when will more be released? If only 10% of the total supply is in the market, the remaining supply coming out in the future can put significant pressure on the price.

The brightest season in 2021 lasted until June and was the longest since 2017. In 2017, it lasted from April to July. But remember: the winners of the previous season may not be the winners of the next.

In conclusion, altcoin seasons can be a great opportunity to make money, but always do your own research. The industry provides enough tools for this. Consider the risks and only invest what you can afford to lose.