Cryptocurrency investment holds big opportunities for huge returns on investment over very short spans of time. But with such potential comes the degree of risk and volatility. And the essence of timing and correct asset choice is making the right or wrong bets.
Bitcoin is still the whale in the crypto space. But savvy investors are aware that altcoins would yield much more returns on investment than the grand Bitcoin. This article describes why and how altcoins can rapidly bring gains, detailing such indicators and tools as assistance in identifying opportunities to achieve huge profits in this market.
With cryptocurrencies, many investors have the curiosity to invest due to the allure of Bitcoin because of its historical returns; but with the high entry price as well as recent market stagnation in Bitcoin, some are starting to wonder if it’s truly the best vehicle for the kind of exponential growth a person is looking to capture.
Cryptocurrencies are fast-evolving, and beyond Bitcoin, the market offers an alternative array of coins. Most of the altcoins have low market caps, known to outperform Bitcoin in some market conditions, making them prime targets for short-term, high-yield gains.
If the investor has strong conviction to make enormous profits from cryptocurrency, they should then diversify into selected altcoins when the market indicators say it is time to enter the market. This strategy coupled with the utilization of an altcoin season index and market timing indicators will enable investors to reap maximum profits while managing the risk associated.
What Are Altcoins?
Altcoins are any cryptocurrency except Bitcoin. These range from well-established coins like Ethereum to lesser-known memecoins like Pepe. Many altcoins have unique use cases or communities that support them, which can lead to higher demand and dramatic price increases.
Why Altcoins Often Outperform Bitcoin
Even though Bitcoin is the most stable cryptocurrency by market cap, altcoins tend to have more significant price movements. The higher volatility is what makes the investments move so fast and potentially shoot up so much.
While Bitcoin can shoot up 70% in one year, an altcoin like Pepe can shoot up 500% within the same year. Of course, the timing can change at any moment as an altcoin can shoot up then fall back down fast.
Key Indicator: The Altcoin Season Index
What Is Altcoin Season?
“Altcoin season” is that period of time when, in general, altcoins are outperforming Bitcoin. During these seasons, it is very easy to generate a decent profit from an investment in altcoins. The index of altcoin season can be located on websites such as blockchaincenter.net. It allows for the tracking of those periods and is thus helpful for any investor who is interested in market timing.
Utilize the Altcoin Season Index for Opportunity Sighting
This index offers a simple measure to determine which is “Bitcoin season” or “altcoin season.” Any leaning of this index towards the altcoin season means it is probable that altcoins will obtain more than Bitcoin. The best time for entering positions in altcoin would then be during that time. Conversely, during Bitcoin season, it will be best to invest in Bitcoin due to the unlikelihood that altcoins can outdo it.
Charts of Relative Percent Change to Determine Better Entry Points
What Are Percent Change Charts?
A percent change chart shows how one asset outperformed another asset in a specific time interval. Using percent change charts with Bitcoin and one of the altcoins as parameters, the investor determines at what time an altcoin begins outperforming Bitcoin, marking a window for a potential short investment entry.
Applying Percent Change Charts in Tracking Trends
For instance, by setting up a chart to track from the beginning of the year, an investor can see that the growth of Bitcoin with regards to altcoins. At the end of the given period, if Bitcoin had risen by 55%, an altcoin had been increased by 500% at the same period – clearly showing that the returns from the altcoin might be higher.
Parabolic Movements in Altcoins
Why Parabolic Moves Matter
Cryptocurrency is synonymous with volatility, but the sweetest opportunities are realized whenever an asset is experiencing a parabolic move — an overnight exponential increase in value. These happen in altcoins mostly in the form of small daily increases followed by an eventual, explosive rise. Parabolic moves are quite obvious once they have been captured and can result in nice profits if identified early in their course.
How to Identify Parabolic Trends
In cryptocurrencies, tracking a few indicators, such as moving averages or relative strength index (RSI), can enable you to identify early signs of a parabolic trend. The major requirement, however, is not to have a simple upward movement. You want that movement to be sharp and sustained. Many traders often rely on the concept known as “higher highs and higher lows,” but for altcoins, that would be better if you sought steep, almost vertical movements on the chart.
Tools for Timing the Market: Cycle and Market Timing Indicators
Why Crypto Needs Timing
Altcoins are extremely volatile, so entries and exits have to be timed right. If you hold an altcoin for too long and the price goes down from a high point, then you might lose all that money. That is why market timing indicators come into play.
Using Cycle and Market Timing Indicators
In prediction terms, website-located trading view-type market timing indicators can indicate where to start entering your investments. Majority of such indicators track the crypto cycle, and if you put some historical events into your thoughts, there are already existing periods of time wherein the altcoin has flourished. Then, an entry and a point where leaving the trades can have optimal gains in them.
Selection of Alternatives Holding a Good Possibility
Small Market-Cap Alternatives
Lower-cap altcoins have higher chances of achieving exponential gain because they do not need a lot of capital inflow to push prices up. Smaller altcoins, for example, capture the attention of those who seek speedy growth as opposed to investment in coins like Ethereum or Cardano.
Look Out for Communities and Use Cases
Usually, altcoins with a strong community or use case tend to experience hype-driven price surges. Memecoins, such as Shiba Inu, experienced mainstream popularity due to its community’s fervor in pushing its prices to new heights.
Conclusion
There’s no investment platform quite like the world of crypto with possibilities of return unmatched in such proportions and scope for high returns unmatched for those bold enough to go beyond Bitcoin. Altcoins are still very volatile, so their growth can be exponential within periods as short as a month if entered and exited at the right times.
The use of instruments like the altcoin season index, relative percent change charts, and market timing indicators may increase the success ratio. Indeed, investing in altcoins might be one of the quickest ways to obtain profits on the crypto market by researching very carefully and keeping close contact with market cycles.
