Introduction

When the cryptocurrency market enters bull mode, altcoins tend to show higher gains than Bitcoin. However, these tokens are also more volatile and can experience sharp declines. Well-defined strategies help maximize gains and minimize risks.

A study from Hotcoin Research on the altcoin season of 2025 describes that the bullish cycle usually follows four stages, measured by the Altcoin Season Index: it starts with Bitcoin dominance (capital concentrated in BTC), moves to the strengthening of Ethereum and large altcoins, then extends to a broad rally of the largest altcoins, and finally culminates in euphoria with small caps and memecoins. Understanding these cycles and adjusting exposure is crucial.

Next, we present five practical tips for trading altcoins during a bull run.

1. Track the altcoin rotation cycle

  • Identify the market stage: in the early stage, Bitcoin leads and the best strategy is to hold BTC and wait. As BTC's momentum cools and the altcoin season index rises, profits often rotate to Ethereum and large altcoins like BNB, SOL, and ADA.

  • Adjust allocation according to the stages: in the final stage (Small-Cap Mania), memecoins and low-cap tokens surge, but risks also increase. Research recommends reducing exposure and avoiding chasing the top in this phase. Monitoring metrics like the Altcoin Season Index and Bitcoin dominance helps recognize these transitions and adjust the portfolio.

2. Focus on quality and technology instead of hype

  • While it is possible to profit from new low-cap coins at the beginning of a rally, experienced investors suggest prioritizing tokens with solid fundamentals as the market matures.

  • Look for projects with differentiated technology (for example, tokenization of real-world assets, AI + Web3, decentralized infrastructure networks, or modular Layer 2), which offer real utility and have well-funded teams.

  • Avoid jumping into tokens just because they are trending: memecoins can surge, but the research itself warns that they are highly speculative and should only make up a small part of the portfolio.

3. Diversify and manage position sizes

  • Diversification helps reduce specific risks. Invest most of your capital in safer assets (BTC, ETH) and only 20-30% in speculative altcoins, distributing them across different sectors (DeFi, AI, infrastructure, gaming, etc.).

  • It is recommended to maintain a portfolio that combines large caps, new tokens, DeFi assets, and innovative technologies. This mix allows capturing different market narratives.

4. Buy and sell in stages

  • An effective way to reduce the risk of entering at the top is to invest in stages (dollar-cost averaging). Regular purchases dilute the average price; if some entries result in a drop, the gains from earlier purchases compensate.

  • The same applies to selling: take profits in parts throughout the rise, rather than trying to hit the maximum point. This smooths out volatility and protects the accumulated capital.

  • Reinvesting part of the profits into additional opportunities can boost gains and take advantage of new narratives.

5. Set clear goals and practice emotional discipline

  • Set profit targets and stop-loss levels before entering any altcoin. The Hotcoin report advises investors to set clear rules for taking profits and stop-losses and to adhere to these rules to avoid losses due to greed.

  • Prepare an exit strategy in advance; do not delay the sale in hopes of extra gains. Planning to withdraw from the market when your portfolio reaches a certain value helps protect gains and avoids frustrations in case of an abrupt correction.

  • Maintain emotional balance: altcoin seasons test your psychology. Avoid impulsive buying or panic selling. Research suggests reducing the frequency of trades or decreasing position sizes when you notice emotions influencing your decisions.

Conclusion

Trading altcoins in a bull market offers high return potential but requires planning and discipline. Knowing the stages of the altcoin season, focusing on quality projects, diversifying the portfolio, investing and divesting in stages, as well as setting clear goals and controlling emotions, are essential points for navigating this scenario with confidence. Remember that no gain is guaranteed; therefore, only invest what you are willing to lose and continue enhancing your knowledge.