The cryptocurrency market capitalization reached a record high of 4 trillion USD in July. Simultaneously, Bitcoin Dominance dropped to 61.5%, the lowest since April. According to analysts, these are clear signals confirming the official start of the altcoin season.
The important question now is when investors should exit the market. Based on insights from experienced traders, this article highlights several key factors to monitor.
Altcoin Investors Started Seeing Profits in July
Most altcoin investors who started buying in June likely saw profits. This is because the altcoin market capitalization (TOTAL2) increased 44% since then, reaching 1.5 trillion USD.
Glassnode's exclusive indicator confirms the capital flow into altcoins began in early July.
Glassnode's Altcoin Season Indicator. Source: Glassnode"Glassnode's exclusive Altcoin Season Indicator was triggered on 07/09. This means the stablecoin supply is expanding, capital is flowing into BTC and ETH, and simultaneously, the altcoin market capitalization is increasing — a favorable structural environment for capital rotation," Glassnode reported.
Today, data from CryptoBubbles shows the market is green. Many altcoins are increasing by 10% to over 20%.
Altcoin Price Performance on 07/18. Source: CryptoBubblesHowever, history shows the late 2024 altcoin season ends with sharp declines. Many altcoins drop by 50% to 90%. Many investors did not act in time and watched their investment portfolios sink deep into losses.
That's why determining when to take profits is just as important as determining when the altcoin season begins.
Analysts Recommend 4 Factors to Determine Exit Time
The simplest and most widely used signal is the Altcoin Season Index. This index is typically used to determine entry points. But when it reaches the upper limit, it also serves as a warning for the broader market.
At the time of writing, Coinglass reports the index is at 49. When it reaches 70 to 100 points, investors are advised to take profits.
Altcoin Season Index. Source: Coinglass"The Altcoin Season Index is rising, and the altcoin market capitalization has increased significantly in recent days. When the index reaches above 70, it's time to sell your altcoins. Right?" — Coinglass reported.
For other investors, technical analysis of the altcoin market capitalization (TOTAL3) is a guide. Analysts like Peter Brandt and Greeny believe TOTAL3 is forming a cup and handle pattern.
TOTAL3 Cup and Handle Pattern. Source: GreenyUsing the measurement theory of that pattern, TOTAL3 could reach a target of 2 trillion USD. This could be an important point where altcoin investors should consider withdrawing.
Some investors track the capital flow cycle to determine when the season might end. For example, investor NekoZ believes the market is currently entering the second stage of the four-stage cycle.
4-Stage Capital Flow Cycle of the Cryptocurrency Market. Source: NekoZ"ETH has started to outperform BTC in terms of returns, which means we have moved to the second stage of the altcoin season," NekoZ said.
In this framework:
- Stage 1 is Bitcoin's dominance.
- Stage 2 is Ethereum outperforming Bitcoin.
- Stage 3 is when large-cap altcoins surge strongly.
- Stage 4 is when small-cap altcoins and meme coins surge strongly, often signaling the end of the altcoin season.
Many observers are closely monitoring this progression.
The final factor to consider is Bitcoin Dominance (BTC.D). In July, BTC.D dropped from 65.5% to 61%, marking the largest monthly decline since November 2024. Analysts, when examining trend lines from previous cycles, believe the altcoin season could continue until BTC.D drops to 48% to 50%.
Bitcoin Dominance. Source: ToraXEach investor may have their own strategy. However, historical experience shows that holding altcoins for too long often leads to losses, unlike Bitcoin, which tends to recover better. When the market is too hot, risks increase significantly.
