Altcoin season
Greetings to you all!
Altcoin season is defined as a market phenomenon in which alternative cryptocurrencies experience a lot of prominent surge in value outperforming BTC and other well known cryptocurrencies.Within this period, investors and traders move their attention from prominent coins to those which are not well recognized less known altcoins which drive up their prices.
Altcoin season normally occurs when cryptocurrency market is in bull run and investors gain high profits.There are different factors which are contributing to altcoin season:
| Market sentiment |
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Optimism and condition of FOMO (fear of missing out) pumps investors for exploring small coins with potential for higher profits.
| Diversification |
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Investors look out for diversification of their wallets by their investments in altcoins which cause reduction in their reliance at Bitcoin and major coins.
| Innovation |
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More advanced technologies, use cases, and innovations in altcoin world would attract investors searching out for the next big thing.
| Liquidity |
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More enhanced liquidity in market enable easy purchase and sell of altcoins which may drive up their growth.
| Characteristics of altcoin season include |
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- There's a requirement of quick price appreciation as Altcoins experience quick increase in price.
- Altcoin have increased volume of trading so Altcoins see a noticeable surge in trading activity.
- New investors and traders could enter into the market and this characteristic is driven up by promise of high gains.
Altcoin season can open more opportunities for making significant profits so it's important to approach them with precautions:
- There's a need first of all to conduct thorough research so understanding altcoin technology, use case, and team before making any investment.
- There's a need to set realistic expectations so there's a need to be aware that not all altcoins will get success and prices can decline as quickly as they increase.
- There's a need to diversify your wallet for spreading investments across a range of assets for minimizing risk.
Altcoin season could be very exciting time for investors and traders, but its important to remain informed, aware, and responsible in making your investment approach.
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