Altcoins can certainly still be played, but it is crucial to recognize that this is a high-risk, high-volatility game, and timing and selection logic are vital. Here is a deep analysis considering current market dynamics:

I. The 'survival status' of altcoins: A tale of two extremes.

1. Market differentiation intensifies:

Leading altcoins (like Ethereum, Solana, XRP) have recently performed strongly; for example, Ethereum surged 40% within three days after completing the Pectra upgrade on May 7, and Solana and BNB saw daily increases of over 3%. However, many mid-to-small coins remain at the bottom, and some projects are on the brink of zero due to liquidity exhaustion or regulatory pressure.

Core logic: Capital is rotating from Bitcoin to leading altcoins, but the '80/20 effect' is significant, with 90% of altcoins likely to miss out on the market rally.

2. Institutionalization and regulation as a double-edged sword:

After the passage of the U.S. (GENIUS Stablecoin Act), stablecoin reserves must consist of 80% U.S. Treasury bonds or cash equivalents, which supports compliant stablecoins like USDC and BUSD and indirectly benefits the DeFi and altcoin ecosystems. However, the bill also strengthens anti-money laundering rules, which may accelerate the elimination of small projects that lack compliance.

Key variable: If spot ETFs for Solana, XRP, and others are approved (Bloomberg predicts a 90% probability), it will directly introduce institutional funds, driving related cryptocurrencies up.

3. Technological iteration creates new opportunities:

Ethereum's Pectra upgrade has been implemented, and account abstraction and Layer 2 optimizations have improved the user experience of DeFi and NFTs; Chainlink's CCIP protocol has led to a 900% quarterly increase in cross-chain transaction numbers, becoming the infrastructure of the multi-chain economy. These technological breakthroughs are reshaping the value logic of altcoins—projects that genuinely solve practical problems (like interoperability and enterprise-level applications) will stand out.

II. The 'start password' for altcoin season: When will it arrive?

1. Key threshold for Bitcoin's dominance:

Currently, Bitcoin's market cap accounts for about 62.6%, while historically, the signal for the start of altcoin season is when Bitcoin's dominance drops to 50%-54%. Although it has not reached that standard yet, there are signs of capital diversion: USDT's dominance has dropped to a 2022 low, and TOTAL2 (the total market cap of altcoins) has broken the downward trend line, indicating that capital is shifting from stablecoins and Bitcoin to altcoins.

2. Time window prediction:

◦ Short term (1-3 months): If Bitcoin stabilizes above $110,000 and maintains high-level oscillation, the altcoin season may start in June to August. Historical data shows that capital rotation often occurs 1-2 months after Bitcoin hits a new all-time high.

◦ Medium term (6-12 months): If the Federal Reserve starts cutting interest rates in September (probability 69.4%), liquidity easing will drive broad rallies in risk assets, and altcoins may experience a comprehensive explosion.

3. Leading indicator observation:

◦ Bitcoin volatility: Current Bitcoin implied volatility is 44.48, lower than Ethereum's 71.78, indicating market expectations for increased volatility in altcoins, which may signal the start of a market rally.

◦ Derivatives market: The trading volume of perpetual contracts reached $691.27 billion, and futures positions surged, indicating that traders are betting on altcoins to break out.

◦ On-chain data: The number of Bitcoin addresses holding balances over $1 has reached a new high of 48 million, reflecting simultaneous entry by retail and institutional investors, providing a funding pool for altcoins.

III. Retail investors' 'survival guide': Avoid traps, seize the main line

1. Three types of altcoins that should absolutely be avoided:

◦ Meme coins without technical backing (like Dogecoin clones): Lack fundamental support and are easily manipulated by speculators.

◦ Small coins without compliance progress: Under the backdrop of the (GENIUS Act) and tightening regulations in various countries, these projects may be eliminated at any time.

◦ DeFi projects with high-leverage collateral: Recently, a lending protocol caused user asset losses exceeding $200 million due to a liquidity crisis, highlighting risk.

2. Four key opportunity directions to focus on:

◦ Leaders in technological innovation: Projects like Hedera (enterprise-level blockchain) and Chainlink (oracles) are realizing their ecological funds and institutional collaborations.

◦ Beneficiary cryptocurrencies from regulation: After XRP's victory in the SEC lawsuit, cross-border payment collaborations surged, and JPMorgan predicts its ETF could attract $4 to $8 billion in funds.

◦ Layer 1 public chains: High-performance chains like Solana and Avalanche are key focuses for institutional funds due to their support for high-frequency trading and NFT minting.

◦ Tokenization of real assets (RWA): The total amount of tokenized U.S. Treasury bonds has exceeded $5 billion, and related platforms (like Centrifuge) may see explosive growth.

3. Suggested operational strategies:

◦ Position control: Total position in altcoins should not exceed 20% of assets, and no single cryptocurrency should exceed 5%.

◦ Entry timing: Gradually build positions when Bitcoin retraces to the support level of $106,000, avoiding chasing highs.

◦ Exit mechanism: Set a stop-loss line (for example, if it falls below 20% of the cost price) and reduce positions when Bitcoin's dominance rises above 65%.

IV. Risk warning: Don't be blinded by the 'altcoin season'.

1. Policy black swan:

Despite the loosening of U.S. regulations, the EU (MiCA Regulation) may require altcoin projects to re-register, and India plans to impose a 30% crypto tax, which could trigger local market crashes.

2. Risk of technological vulnerabilities:

A certain Layer 2 project was attacked due to a smart contract vulnerability, resulting in user losses exceeding $100 million, highlighting the technological fragility of altcoins.

3. Emotional traps:

The fear and greed index plummeted from 60 to 44, showing extreme divergence in retail sentiment; blindly following trends may become a 'greater fool' scenario.

Conclusion: The 'golden window' for altcoins has opened, but one must 'dance with shackles'.

The current market has the conditions for the start of altcoin season: Bitcoin stabilizing above $110,000, institutional funds entering, and regulatory frameworks becoming clearer. For retail investors, now is a strategic opportunity to position in leading altcoins, but discipline must be strictly adhered to, avoiding all-in bets and leverage. Remember, a true altcoin season does not mean all coins rise together, but rather a 'structural bull market' for a few high-quality projects. If you cannot discern the quality of projects, then dollar-cost averaging into Ethereum and Solana may be a more prudent choice. Finally, a reminder: the essence of cryptocurrency is a technological experiment, and any investment should be prepared for a total loss.