For those investing in cryptocurrencies, “altcoin season” is one of the most exciting times of the year, even more so than the winter holidays. During this period, lesser-known cryptocurrencies, referred to as altcoins, can experience dramatic increases in their value.

Currently, all signals suggest that altcoin season is upon us. Let’s examine what altcoin season entails, its implications for investors, and which cryptocurrencies are likely to gain the most from this phenomenon.

Defining altcoin season

For the majority of the year, most cryptocurrencies tend to move in sync with bitcoin (CRYPTO: BTC), the dominant cryptocurrency that holds an impressive 54% of the entire crypto market value. When bitcoin rises, other cryptocurrencies usually follow suit, and vice versa.

Market analysts primarily concentrate on bitcoin to predict crypto market trends due to its substantial influence.

However, there are times in the market known as “bitcoin season” and “altcoin season,” where the usual pattern shifts.

During bitcoin season, investors invest heavily in bitcoin, leading it to outperform other cryptocurrencies. Conversely, during altcoin season, funds shift from bitcoin to various riskier altcoins, which often results in significant gains for these smaller coins.

Is it really altcoin season now?

Luckily, there are several indicators that investors can monitor to assess whether altcoin season has begun. It’s important to note that, unlike the holiday season, there isn’t a definitive start date for altcoin season. At times, key indicators may offer conflicting messages, and there can be disagreements over which indicators matter most to traders.

What makes this moment particularly thrilling for crypto enthusiasts is that all major indicators are pointing in the same direction—yes, altcoin season is indeed here.

The standout indicator right now is the Altcoin Season Index. This simple metric is calculated by reviewing the top 100 cryptocurrencies (excluding stablecoins, as they remain constant in value) and determining how many have outperformed bitcoin over the past 90 days. If at least 75 out of these top 100 coins have surpassed bitcoin, it signals the start of altcoin season.

Presently, the Altcoin Season Index from CoinMarketCap sits at 82 and has surged dramatically since the U.S. presidential elections in November. It jumped from 33 to as high as 87 before settling back a bit.

This year’s altcoin season caught many off guard, especially since most investors have been preoccupied with bitcoin’s climb towards the $100,000 mark, overlooking the impressive performances of smaller cryptocurrencies.

Which altcoins are worth investing in?

The data from CoinMarketCap reflects astonishing growth in various altcoins over the previous 90 days. Hedera (CRYPTO: HBAR) has surged by 481%. Stellar (CRYPTO: XLM) has increased by 415%. Sui (CRYPTO: SUI) is up 383%. Dogecoin (CRYPTO: DOGE) has grown by 346%. And XRP (CRYPTO: XRP) has risen by 329%. This is typical of an altcoin season.

In contrast, bitcoin has only increased by 79% during this time frame, while Ethereum (CRYPTO: ETH), the second-largest cryptocurrency, has seen a mere 67% rise.

This illustrates why altcoin season is thrilling for crypto investors. While many are focused on acquiring as much bitcoin or ethereum as they can, others are diverting their investments to altcoins for potentially higher returns.

This leads to an intriguing question: Which altcoins should you consider purchasing at this moment? The common advice here is to prioritize more established, top-market-cap cryptocurrencies, while steering clear of meme coins or any investments driven by hype and speculation.

With this in mind, Sui appears particularly appealing right now. Even before altcoin season began, this cryptocurrency was attracting considerable attention. Known as a promising competitor to Ethereum, it offers speed, affordability, and efficiency. Currently, it ranks as the 17th largest cryptocurrency by market capitalization and is garnering interest from institutional investors.

Be careful with market timing

However, it’s crucial to remember that the onset of altcoin season should not lead to attempts at market timing. The market can easily mislead investors and play on emotions. As we’ve witnessed this year, the Altcoin Season Index can fluctuate dramatically over a short period.

Therefore, caution is key when considering investments now, as investing.

Investing in a small, unknown cryptocurrency can be risky, especially if you’re caught at the tail end of what seemed like altcoin season. Instead of trying to predict market movements, focus on altcoins that you genuinely believe will perform well in the long run.

Even if you’re skeptical about the current state of altcoins, it’s worthwhile to think about which cryptocurrencies might have strong growth potential as we approach 2025. This could be the perfect moment to discover a hidden blockchain asset poised to surpass bitcoin in value next year.

Dominic Basulto holds investments in bitcoin, ethereum, and SUI. The Motley Fool has investments in and recommends bitcoin, ethereum, SUI, and XRP. They also advocate for Hedera Hashgraph, and you can find more about their disclosure policies.

The Motley Fool collaborates with YSL News to provide financial news, insights, and analysis to empower individuals in managing their finances. Their content is produced independently of YSL News.

Seize this second chance for a potentially rewarding investment

From the Motley Fool: Have you ever thought you missed your opportunity to invest in the next big stock? If so, you’ll want to pay attention to this.

Our team of skilled analysts occasionally provides a “Double Down” stock recommendation for companies they predict are about to experience significant growth. If you fear that your chance to invest has passed, now might be the ideal moment to act before it’s too late. The facts are compelling:

• Nvidia: A $1,000 investment when we issued a “Double Down” in 2009 would now be worth $369,349!*
• Apple: If you had invested $1,000 when we made our call in 2008, you would have $45,990 today!*
• Netflix: A $1,000 investment in 2004 would now yield $504,097!*

Currently, we’re issuing “Double Down” alerts for three exceptional companies, and this might be a rare opportunity.