Every bullish financial market has an end and it is wise to withdraw in time.
When the bull run is over, altcoins usually fall in price very violently.
When prices in the cryptocurrency market start to rise massively, we know something is heating things up. And I’m not referring to climate change or the oppressive heat of Buenos Aires these days.
We are talking about the altseasona phenomenon that many investors, analysts and traders expect to arrive with force in 2025, as reported by CriptoNoticias.
But before you jump into investing in altcoins, you need to understand this period of euphoria and why it is important to handle it as if you were playing the hot potato game. This means knowing when to enter and, most importantly, when to exit before the market cools down.
First things first, what is altseason? For neophytes in the field, the altseason or altcoin season is that moment when alternative cryptocurrencies (all those that are not bitcoin) begin to rise in price at an accelerated rate.
The Blockchain Center organization define “altseason” as follows:
«If 75% of the top 50 coins performed better than bitcoin during the last season (90 days), it is altcoin season. Excluded from the top 50 are stablecoins (Tether, DAI…) and asset-backed tokens (WBTC, stETH, cLINK…).”
Blockchain Center, organization specialized in cryptocurrencies.
The altseason is like the surprise party that everyone knows is going to happen, but no one knows exactly when it starts. And when it happens, everyone wants in.
Now, let’s get into the hot potato game, a most appropriate metaphor to describe what is happening with altcoins during this season.
The game is simple: they pass you a hot potato (in this case, a rapidly appreciating altcoin) and your goal is to make a profit, but then pass it on to someone else before you burn your hands (i.e. before the altcoin value falls drastically).
It’s a musical chairs dance where the music can stop at any moment, and you don’t want to be the last one to find a seat. And whether you like it or not, It is a game where for some to win, others necessarily have to lose (and the majority loses)..
Altcoins, unlike bitcoin (which also falls in price, although more moderately), tend to have much less liquidity and a more limited adoption base, making them extremely volatile. When the market soars, the rises can be dreamy, but Altcoin declines can be an investor’s worst nightmare.
🙋♂️A personal story
Before continuing reading I will tell you a sad anecdote that taught me a great lesson: in the bullish cycle of 2020-2021 I was able to see how a cryptocurrency in which I had invested at the time of its launch rose more than 20 times.
My “financial freedom” seemed closer than ever! But, I did not sell that token or take profits along the way, hoping that its price would continue to rise even further.
What happened next? Just as I saw that digital asset, whose name is WaultsSwap (WEX), rise, I also saw how it suddenly plummeted “to zero” and along with it my dreams of quick and easy wealth fell.
Finally, after waiting several months for a “resurrection” that never happened, I ended up selling my WEX tokens for a price much lower than my initial investment.
Therefore, if you venture into the world of altcoins during this season (something that, in my opinion, only experienced investors with a lot of knowledge of the market should do), you must have a clear exit strategy.
❌Bitcoin and cryptocurrencies are not the same
It is not wise to “marry” any altcoin. In the 16-year history of the cryptocurrency market, bitcoin (BTC) has proven to be the only asset that, with certainty, could be «held» long term.
Bitcoin is like that stable couple that you know, despite the fights, will always be there. Altcoins, on the other hand, are like those intense but fleeting summer romances that, although exciting, often leave more tears than happy memories.
So how do you prepare to drop the hot potato before you burn yourself? A strategy can be set selling price goals before buying. Don’t enter the market without a plan. Decide in advance at what price you are willing to sell, both to take profits and to cut losses.
The use of indicators available in TradingViewsuch as moving average crossover, may be useful. CriptoNoticias has prepared an exit strategy tutorial focused on the bitcoin market, but which, with some adaptations, may also be useful for altcoins.
Don’t get carried away by FOMO (fear of being left out, for its acronym in English). Collective euphoria is contagious and can cloud your judgment.
And most importantly, learn along the way. The altseason is a time of learning, of better understanding the rhythms of the cryptocurrency market and of fine-tuning your investment strategies. So, Enjoy the climb, but always be ready to jump off the train before it derails!
⚠️ Responses to possible objections:
«But my youtuber favorite told me that [inserte nombre de criptomoneda] It will be the new bitcoin! – Answer: he has lied to you. Don’t trust him (or me either, do your own research).
“But I read a tweeter who wrote that XRP will be worth $500 in this cycle!” – Answer: that doesn’t make sense. XRP at that price would have a higher market capitalization than gold. Use common sense.
«But this time it will be different! “All cryptos will rise forever now, because the market has changed” – Answer: for more than 10 years it has always been said that “this time it will be different” and it is never different. At some point the bull cycle will end.
Disclaimer: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of CriptoNoticias. The author’s opinion is for informational purposes and under no circumstances constitutes an investment recommendation or financial advice.
