Now the Crypto market has passed the 'everyone-wins' phase – where anyone participating makes a profit – and is heading towards a more concentrated growth phase in Altcoins. Bitcoin has skyrocketed in recent years, bringing the price from a few thousand to over 118 thousand USD. Previous growth cycles (2017–2018 and 2020–2021) have shown that Bitcoin rises first, followed by waves of investment into Altcoins. This means that the 'Cake Everyone Can Have' is shrinking; the upcoming phase will only be for investors with strategy and discipline.

Bitcoin has increased nearly 12 times in the past 5 years (up ~1,118% according to the chart above). Currently, Bitcoin has surpassed 118,000 USD, while many major Altcoins have also increased several times. However, history shows that after Bitcoin peaks, capital will successively rotate into Ethereum, Solana, ADA, XRP... Thus, the phase where 'everyone wins' has gradually come to an end, signaling the transition to Altcoin Season – a place where only astute investors can profit.

Altcoin Season and Market Signs

The Altcoin Season Index is a popular indicator to determine whether an 'Altcoin money' phase is occurring. This index measures what percentage of the top 100 Altcoins have outperformed Bitcoin in the past 90 days. When over 75% of Altcoins beat Bitcoin, it is considered a true Altcoin season.

In the past, for example, during the Altcoin season in May 2021, the cumulative market capitalization of the top 100 Altcoins reached about 130% of Bitcoin's market capitalization, and large-cap Altcoins increased an average of 174% compared to only 2% for Bitcoin during that period. This is evidence of the power of the Altcoin Season phase: prices rise very strongly and outperform Bitcoin.

In reality, by mid-2025, many signs of the beginning of Altcoin Season have been recorded. A recent report stated that Bitcoin is trading around 118,000 USD, Ethereum around 3,700 USD, and the Altcoin Season Index has risen from ~12 to ~50 in just one month. This indicates that capital is gradually shifting from Bitcoin to Altcoins.

At the same time, Bitcoin's Dominance ratio has decreased from ~64% to ~60.5%, signaling a flow of money into Altcoins. Although it has not yet reached the 'eruption' level (Altcoin Season Index >75), coins like ETH, SOL, ADA, XRP have all increased by 15–30% in just the past few weeks. Such indicators suggest we are in the 'kickoff' phase for the Altcoin frenzy.

Entering the Altcoin Season phase, the market will surge with new Altcoins and capital tends to flow from Bitcoin to 'ready-to-explode' assets. At the same time, the FOMO (fear-of-missing-out) mentality will emerge: many investors chase the frenzy without a specific strategy. When people believe that Altcoin prices can only go up (the euphoria phase), the frenzy peaks: early holders begin to distribute to take profits.

Therefore, you will see many people 'thriving' 10x, 20x and then losing everything because they entered late and did not have a clear exit plan. According to Indodax's analysis, the Altcoin Season cycle goes through phases of Fear – Greed – FOMO – Euphoria – Distribution. Understanding this model is key to knowing when to enter and when to exit before the crowd floods in.

Safe Investment Strategy During the Frenzy

During the Altcoin wave, 'psychology' and discipline are more important than luck. Below are some basic strategic guidelines recommended by experts:

  • Only use idle money: Absolutely do not put living expenses or emergency funds into the crypto market. Only invest money you can afford to lose. Crypto is a high-risk asset class, so always treat it as venture capital.

  • Diversify your portfolio: Do not put all your eggs in one coin or market. Allocate capital across multiple assets: Bitcoin, Ethereum, coins in the AI, DeFi sectors... to minimize individual risk. TokenMetrics advises: 'Diversification: spread capital across different coins and sectors (Bitcoin, Ethereum, AI tokens, DeFi, etc.)'

  • Take regular profits: Set profit targets when buying. For example, when a coin increases by 50–100% compared to the purchase price, take some profits to secure capital and profit. Many experienced traders often take back 100% of their capital when the price doubles, then let the remaining part run with the market. This strategy helps you avoid being 'isolated' when prices suddenly reverse.

  • Use Stop-Loss and position rules: Always set stop-loss orders at reasonable price levels to limit losses if the market reverses. TokenMetrics emphasizes using stop-loss to 'prevent small losses from turning into disasters.' Also, do not bet all your capital on a single coin – 'No all-in' but only keep a small portion for each trade. The 1–2% rule (only risk 1–2% of total capital for each trade) is a commonly applied safety standard.

  • Control your psychology and reduce leverage: Absolutely avoid letting psychology lead. When you see signs of frantic buying (social media flooded with 'to the moon' and 'FOMO', the Fear & Greed Index shifting into an extreme zone), it is often a warning signal. Reduce your holdings and gradually take profits. Do not risk using excessively high leverage – altcoin volatility can be so large that it could wipe out accounts if the market reverses.

  • Understand the high risks of Altcoin: Be aware that Altcoins can increase by hundreds of percent, but can also drop by 50–90% after a peak. Set a worst-case scenario for each coin: if the risk is high, you must be ready to take profits or cut losses early.

Strictly implementing the principles above helps you protect capital during unstable periods. For example, if an Altcoin suddenly triples in just a few days, instead of waiting for further increases, you can sell a portion to secure gains and reduce risk. When the crowd is enthusiastic, a simple defensive action is to move assets to 'safer' coins (like BTC, ETH, or stablecoins) and tighten stop-loss orders. As one analysis notes: when the market shifts into an excessively 'euphoric' state, that is the time to reduce holdings to secure profits.

Conclusion

The Altcoin Season phase requires alertness and planning, not just following the crowd. Remember that in moments of price frenzy, every candle's rise and fall is a challenge to your psychology, not just your IQ. By applying strategy and discipline, you can profit from the upward momentum without getting swept up in the frenzy. In contrast, simply 'trading on emotion' can lead many investors to suffer heavy losses.

Note: The above article is for general reference only and is not specific investment advice. Crypto always carries high risks; investors need to conduct their own research, prepare strategies, and manage capital strictly before making decisions.