If you are entirely new in the crypto sphere, there is a chance you have not heard the term alt season before. Altseason is simply the short form of altcoin Season. An altcoin can refer to any other cryptocurrency except for bitcoin. This is a period when digital assets, barring bitcoin, start thriving, and the value of altcoins begin rising.
The altseason is like Christmas in the digital assets sphere. The altseason gives you the best chance to make very substantial gains by either trading or investing in altcoins. Trading will enable you to accumulate as much BTC or fiat depending on the strategy you choose to deploy. In the long run, the altseason is a time when investors and traders alike can make substantial gains over the year.
We have not experienced plenty of altseasons yet with the most significant one having taken place back in December 2017. In this article, we are going to take a look at how you can prepare to have a successful altseason by trading altcoins.
How to prepare for the 2021 altseason
During altseason, you do not want to hold and preserve altcoins rather than sell them. What could happen if you decide to hold tokens rather than sell during altseason? The correct answer is that you will miss out on reaping huge rewards like any other astute cryptocurrency investor. Knowing when the next altseason will take place is essential if you are aiming to benefit. Here are five tips to help you have a successful next altseason:
Understand what is Bitcoin Dominance
Bitcoin dominance equates with the percentage of the total market share held by bitcoin in the cryptocurrency market. Bitcoin dominance shows the number of people in the market selling or holding to their BTC. Bitcoin dominance spikes when the number of people buying or holding BTC rises. When it spikes, the market capitalisation of bitcoin surges and this negatively affects the market value of altcoins.
On the other hand, bitcoin dominance drops when bitcoin holders start disposing of their BTC by selling. As a result, the market value for alternative coins surges as bitcoin value starts dropping. It is safe to say that altseason occurs when bitcoin dominance decreases. Most bitcoin owners will exchange their BTC for either fiat or altcoins.
When bitcoin owners offload their holdings, holding on to your altcoins at this time could increase their market value. This is also the best time to sell your altcoin holdings. Reason? Crypto investors at this time are willing to purchase altcoins rather than bitcoin. This translates into more gains for the altcoin market.
Have the right investment tools
Serious investors and traders are always willing to invest in the best available tools in the market that will make their life easier. Cryptocurrency trading is very lucrative, but it can turn out ugly if not done correctly. There are various tools out there that are meant to make the life of a crypto trader easy such as market watcher, portfolio manager, portfolio balancer, reliable wallets, charts, crypto news aggregator, and finally reliable exchanges or trading apps where you can go and trade.
To get the best experience investing or trading altcoins, you have to choose the best trading app that meets your needs. Because the altseasons do not last forever, you should choose the best trading app to make frequent profits from every price fluctuation. The best choice would be a CFD trading platform because they allow you to trade altcoins without paying commissions. We recommend Bitcoin Digital if you wish to join a platform that enables you to potentially gain profits from every change in market price. Learn how to start trading with this beginner-friendly website.
Always take profits
It would be very imprudent if you decide to hold on to your altcoins rather than sell them when bitcoin dominance is high. The market value of altcoins is likely to plummet during this time massively. It would be wise to offload your altcoins when bitcoin dominance is on the decline since it’s during this time that altcoins are at their highest. If you become greedy and decide to hold on longer, you are likely to miss out on very significant gains. It would be wise to sell if you get 100% gains before getting caught in the inevitable retracement.
Do not FOMO
Many people have a fear of missing out (FOMO) in the cryptocurrency market. When people note that the altseason is about to start again, the amount of investment injected into the altcoins spikes. This is the snowball effect; investors are afraid of being left out, and as a result, they invest more and more. This is one of the reasons why the market value of altcoins rises tremendously during this period.
Notably, FOMO has made the lives of very many traders miserable after making them make costly mistakes. To keep your fear of missing out in check, you have to understand that losing is also part of the game. There is nothing shameful in missing an opportunity now and then. It is part of the investing experience. To avoid FOMO, it is advisable to research the cryptocurrency market and learn all its advantages and disadvantages. Be aware of how instincts may disappoint you.
Diversify your altcoin portfolio
The best way to make the most gains during the altseason is to diversify your altcoin portfolio. You can select altcoins that you see have colossal potential from a fundamental perspective. The easiest way to achieve a diverse selection is to make sure you choose the big winners. Notably, it is wise to conduct your own fundamental and technical analysis to identify the best altcoins to invest or trade. Smart investors and traders understand that it is risky to put all your eggs in one basket. Crypto diversification ensures that you curtail losses if one or more tokens perform poorly.