The Night Before the Altcoin Season: How to Build a Suitable Altcoin Season Investment Portfolio?

Original author: cyclop

Original compilation: Tim, PANews

These are the clearest bull market signals I've seen in my seven years in the crypto market:

• BTC is close to its all-time high
• Retail interest is near historical lows
• ETH/BTC ratio has broken a three-year downtrend
• Altcoin index has rebounded from a range low

Each of these factors has previously triggered an altcoin season. Now they have all converged, creating a resonance.

Is this really the beginning of the next altcoin season?

I can't believe I'm saying this, but I genuinely think we are finally about to see a surge in altcoins.

In this lengthy post, I will analyze in detail:

• How market sentiment has shifted and why I am bullish
• What changes have occurred that ultimately make an altcoin season possible?
• Important future catalysts
• Key indicators and their signaling
• Which altcoins might surge
• How to build a suitable altcoin season portfolio
• How to research hard-to-implement projects

I have been in the cryptocurrency space for seven years and have witnessed dozens of market structures that triggered altcoin seasons.

Yes, cycles have indeed changed, and I have detailed the process and reasons for these changes in the referenced post.

However, I believe we are at the beginning of a more sustained altcoin season, and this trend does not need Bitcoin's price to skyrocket to $150,000 to support it.

The narrative around BTC has fundamentally shifted, from being seen as a Ponzi scheme to: a top investment vehicle for macro hedging, the sixth largest asset by market cap (and recognized by S&P), a hedge against inflation, and a primary countermeasure for isolated or high-inflation countries.

An increase in Bitcoin's price from its current position is no longer a necessary condition for the start of an altcoin season.

The magnitude of Bitcoin's price surges (in percentage terms) will decrease, as will its drops. As market capitalization expands, its price volatility will diminish. Every year, Bitcoin's trend as a store of value asset becomes increasingly evident, rather than a speculative asset.

This is where the "value" of altcoins lies.

High-market-cap altcoins, especially blockchain projects, are no longer seen as "alternatives to Bitcoin." They are now viewed as tech companies operating within the broader Bitcoin ecosystem. Ethereum is like Nvidia, and Solana is akin to high-performance infrastructure, and so on.

This shift in perception has also occurred in past market cycles, each marking the beginning of an altcoin season. Now, let's discuss what actual changes have occurred that ultimately make an altcoin season possible.

After the Pectra upgrade, Ethereum surged and broke a three-year downtrend in the ETH/BTC ratio. Every skeptic turned into a believer. Bitcoin's dominance just experienced its most severe three-day drop since November 2024. Sentiment in the altcoin market has plummeted, and even after this slight uptick, retail participation remains at historical lows. In my view, the Pectra upgrade changed the game. This solution also addressed the biggest obstacle facing Ethereum-driven altcoin season surges: issues with user interface and user experience.

Retail Index

Despite widespread adoption, the retail index is currently close to historical lows. This factor has always played a crucial role in the early stages of past altcoin seasons. Now, it has once again become a positive signal. Let me elaborate:

It is important to understand a simple truth: assets peak when they are in absolute best condition and bottom out when in despair. Altcoins are still in a dire situation, but from this moment on, the only way is to rise against the trend and rebound.

What are the catalysts for the rise of Ethereum and other altcoins? There are many. What about the downward triggers? None; the market is extremely bearish. Even if it rises twofold from the bottom, the retail index (in part) has not appeared or met standards. Finally, we have reached a moment where even if altcoins have risen fourfold, it still seems possible to rise another tenfold.

ETH/BTC Chart

The ETH/BTC ratio has been in a downtrend for five consecutive months, negatively impacting ETH. Its price and attention have both declined, making it harder for altcoins to rise. After breaking through key resistance, Ethereum's price surged, releasing a strong signal for the rise of altcoins.

Now let's take a look at some key indicators, such as:

• Global liquidity
• Stablecoin index
• Altcoin season index

All these signals indicate a potential trend reversal and liquidity influx into the crypto market, signaling the arrival of an altcoin season.

But this time, the altcoin season will be different.

In the last cycle, there were fewer altcoins, so almost all coins surged. This time is different: severe oversupply makes it difficult for all altcoins to maintain their upward momentum. It is likely that less than 10% will experience significant changes, and the key is how to find these potentials.

Your choices depend on the level of risk you are willing to take and how much profit you hope to gain.

• Large-cap stocks = low profit + low risk
• Mid-cap stocks = moderate profit + moderate risk
• Small-cap stocks = high profit + high risk

Altcoin Research Methodology

If it is a high-market-cap and practical token, rather than a newly emerged meme coin, it is best to pay attention, as the risk of encountering scams is relatively low in this case. Tokens can be analyzed based on the following aspects:

• Market cap
• Liquidity
• Trading volume
• Listing status on centralized and decentralized exchanges

Then create a list of altcoins you like.

Follow trusted KOLs and investigate whether they are paying attention to or mentioning the project.

If a project is being followed by many KOLs but they themselves are not invested, then it is likely to be garbage.

Analyzing Projects

Start conducting detailed research on the altcoins in your list.

Check the following:

1) What is the core idea of the project? Is there market demand?

2) How is the product quality? Please take a detailed look at its official website and social media platforms.

3) Are the project team members public? Who are they? What are their backgrounds?

Patience + Belief = Hundredfold Returns

Hundredfold returns will not be realized in a day, a week, or even a month.

By deeply researching potential projects and holding them long-term.

Continuously track project progress, version updates, and ecosystem activity.

The most important principle:

Do not over-diversify your holdings. Do not invest based on others' beliefs. The screenshot below illustrates the reason.

Conclusion

Most indicators clearly signal that an altcoin season is approaching; all that remains is to be well-prepared. Remember: if you believe in everything, you believe in nothing. Do not pick dozens of projects; select at most five and maintain a cautious attitude.

Only in this way can you capture that less than 10% of potential altcoins that are likely to achieve hundredfold returns. If that’s not enough, just look at this chart and you will understand.

0/30 bull market peak indicators have been triggered. Strange, right?