Bull Market and Altseason in Crypto: How to Navigate and Maximise Potential

What is a Bull Market and Altseason?

Navigating a crypto bull market and altseason can be both exhilarating and challenging for investors. Historically, these cycles have presented significant opportunities, but managing these favourable moments isn’t easy. This guide offers practical strategies to help you approach the bull market and altseason, helping you avoid common pitfalls driven by emotions such as greed and unchecked optimism.

Before diving in, note that while we reference historical data, past events may not replicate exactly in future cycles.

When do Bull Markets and altseasons begin?

Determining when a bull market or an altseason begins takes a lot of work. Typically, each cycle starts with Bitcoin’s price moving upwards, sparking widespread predictions. However, understanding the timing of a market cycle is often more valuable than chasing arbitrary price targets.

Key indicators to monitor include Bitcoin dominance, which reflects BTC’s market weight relative to other cryptos, and the ETH/BTC ratio, which compares Bitcoin’s performance to Ethereum. Another essential metric is the time elapsed since the last Bitcoin halving event, which often correlates with shifts in market phases.

The crypto market cycle and the role of Bitcoin halving

The crypto market cycle is closely tied to Bitcoin’s halving events, which occur approximately every four years. Halving halves the mining rewards, effectively reducing BTC’s supply growth. Each halving has historically set off a new cycle, usually lasting about 1,000 days. Peaks generally occur a year after the previous all-time high (ATH).

Bitcoin’s market cycles usually follow this structure:

• Bull Market: A prolonged upward trend, with BTC leading initially.
• Altseason: Often a sub-phase within a bull market where alternative cryptocurrencies, or “altcoins,” outperform Bitcoin.

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Key phases of a Bull Market

Everyone now knows that we are in a bull market. The price of BTC has just surpassed $90,000 and seems poised to continue rising. However, let’s take a look—drawing on historical data—at the main phases of past bullish cycles.

Phase 1: Bitcoin takes the lead

At the beginning of a bull market, Bitcoin typically absorbs the majority of new liquidity entering the market. Other cryptocurrencies, including Ethereum, often need help keeping up with Bitcoin’s explosive gains.

Phase 2: Ethereum gains momentum

Once Bitcoin’s price stabilises or reaches a local peak, liquidity matures into Ethereum. This marks the beginning of Ethereum’s outperformance relative to Bitcoin, often accompanied by gains in promising altcoins.

Phase 3: altseason begins

As Ethereum gains traction, confidence in higher-cap altcoins rises, igniting altseason. In recent cycles, altcoins with lower market capitalisations have experienced significant price increases during this period, driven by a renewed interest in diversifying beyond Bitcoin and Ethereum.

During the last bull market, the undisputed standouts were Solana (SOL), which rose by +1,200% from May to November 2021, and Avalanche (AVAX), which increased by +1,500% from June to December 2021.

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Phase 4: altseason peaks

The end of altseason often coincides with high-risk, explosive price movements in smaller, less established cryptocurrencies. This period is high in FOMO (fear of missing out) and requires caution. Once prices start to decline, it may signal the end of the bull market, and holding riskier assets can lead to substantial losses.

Why Ethereum often lags behind Bitcoin early in the cycle

Ethereum’s initial lag behind Bitcoin has become even more pronounced in recent cycles. This disparity is largely due to Bitcoin’s status as the most established and “safer” asset within the crypto space. During the early stages of a bull market, investors typically favour Bitcoin over altcoins, including Ethereum. This preference has been amplified with the launch of Bitcoin spot ETFs by major investment funds, enhancing Bitcoin’s appeal as a lower-risk investment.

A concept called “capital rotation” explains this pattern: initially, liquidity flows into Bitcoin, and as Bitcoin stabilises, investors begin to allocate funds to Ethereum and, later, other altcoins. For this reason, tracking Bitcoin dominance and the ETH/BTC ratio is crucial, as they often provide early signals of altseason onset.

Historical Timeline of Market Cycles

Examining the timing of previous cycles is helpful for effectively managing a bull market and all seasons. While exact patterns don’t repeat, they can offer valuable insights into potential timelines.

2017 Bull Market

• Halving Date: 11 July 2016, BTC price at $650.
• First ATH Post-Halving: 225 days later, on 21 February 2017, at $1,115.
• Peak ATH: 297 days after halving, on 15 December 2017, at $19,000.
• Overall Return: Approximately +2,800% from ATH to ATH.

2020 Bull Market

• Halving Date: 11 May 2020, BTC price at $9,000.
• First ATH Post-Halving: 216 days later, on 13 December 2020, at $19,200.
• Peak ATH: 330 days post-halving, on 8 November 2021, at $69,000.
• Overall Return: +259% from ATH to ATH.

2024 Bull Market

• Halving Date: 22 April 2024, BTC price around $65,000.
• First ATH Post-Halving: 195 days later, on 5 November 2024, BTC reached $80,000.
• Speculative Projection: Bitcoin might reach the peak ATH for this cycle around September 2025 if history repeats.

Ethereum’s Timeline

Ethereum, launched in 2015, has less historical data, but in the previous bull market, it exceeded its ATH from January 2018 to January 2021. If the pattern holds, Ethereum could reach a new ATH soon.

Conclusion 

A disciplined approach to timing and strategy can be a significant advantage during bull markets and altseasons. Remember that while the crypto market tends to follow cyclical patterns, these cycles don’t guarantee identical outcomes. Tracking market indicators like Bitcoin dominance and the ETH/BTC ratio can be instrumental in spotting the onset of altseason. However, as the end of the cycle nears, it’s essential to reassess exposure to high-risk assets to avoid potential losses when the market reverses.

Stay mindful of these cycles, adapt strategies accordingly, and remember to balance optimism with caution.

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