Стас Юрасов Crypto 13 January 2025, 14:41

Not just Bitcoin! How to make money on altcoins in 2025. Here are some recommendations

Crypto analysts associate 2025 with the beginning of a new altcoin season. This is a period of time when alternative coins begin to grow much faster than Bitcoin, and knowing when it will be, you can make a good profit.

In December 2024, Bitcoin broke the 100K mark! And that was really exciting. However, do you think there will be a flow of money into altcoins after the BTC correction?

Yes, liquidity flows from BTC to altcoins do occur, but it depends on the market phase. Bitcoin, as the main index asset of the crypto market, influences the price movement of most cryptocurrencies. Its rise or fall determines the overall dynamics of the market. However, due to the large capitalization of BTC, its potential for significant growth is limited, which encourages speculators to look for opportunities in altcoins with higher profit potential.

Recall that Wirex recently celebrated its 10th anniversary: earn up to 8% on every card transaction

Liquidity spillover into altcoins usually begins when BTC reaches a local high or shows signs of weakness, such as a halt or small correction, after an impulsive rise. At such moments, investors and traders look for alternatives that can bring more income.

Another important factor is the seasonality of the market:

February-April is usually a period of active capital allocation, when there is partial profit fixation from BTC and interest in other assets grows.
May-June is a period of possible corrections that create a base for accumulation.
August-October is traditionally the time of market recovery and the beginning of altcoin growth against the backdrop of BTC stabilization.

When will it start or has it already started?

Altcoin bulls occur when speculators see weakness in BTC’s movement after a rapid rise. This usually occurs during a consolidation or stabilization phase of BTC, when the asset moves in a narrow range without significant changes. At this time, capital begins to flow into altcoins, especially those with strong fundamentals or news supporting their growth.

CrypSee — easy exchange of USDT for hryvnia. Join

Signals of the beginning of liquidity flow can be seen on the charts:

BTC.D (BTC dominance): If the indicator is falling, it signals an increase in interest in altcoins.
TOTAL (total market capitalization): an increase in total capitalization with a parallel decrease in BTC.D indicates an active liquidity flow.
TOTAL3 (altcoin capitalization): the growth of this indicator against the background of BTC stability is a key marker for the beginning of active growth of altcoins.

Thus, spillovers may already be occurring if we see a decline in BTC dominance amid stability in its capitalization. However, it is also important to consider the seasonality of the market: in the current conditions, it is reasonable to expect the market to stabilize within 2-3 months with a potential rise in altcoins closer to the next stage of recovery.

To avoid mistakes, it is worth remembering about risk management:

Don’t catch «knives» at local highs or lows.
Partially take profit at peaks to reduce risk.
Use seasonal trends and fundamental analysis to select assets with the greatest growth potential.

How to choose an altcoin for investment? What are their features/features to pay attention to?

Before choosing altcoins to invest in, we recommend that you determine your investor type, expectations, goals, risk appetite, and investment horizon. The answers to these questions will determine the choice of market and assets to invest in.

Buy Bitcoin on Paybis.com with a card

To make an informed investment decision regarding a cryptocurrency project, it is important to conduct thorough research. If you are serious about building an investment portfolio, pay attention to the information on the official website and in the project’s Whitepaper. You can also find some of the necessary information on rating platforms such as Coingecko or Coinmarketcap.

It is also important to follow the project’s news and updates, which are usually posted on its official Twitter accounts.

The next step is to study:

Token value: it is based on the potential value of the project and demand.
Liquidity: determined by trading volumes on exchanges.
Development teams: the experience and qualifications of the team are key factors for success.
Technology and economic model of the project. It is also important to analyze indicators such as FDV, market capitalization, coin unlocking and allocation. FDV (Fully Diluted Valuation) is one of the most important indicators — the closer FDV is to market capitalization, the better.

What amounts should be invested in altcoins and what strategy is best to choose?

There are different strategies for investing in altcoins. One of the simplest is the DCA (Dollar Cost Averaging) strategy. However, its effectiveness is not always the best. In the current environment, it is important to have a clear plan of action and understand:

What and when to sell?
Where and in what proportions should funds be transferred?

The strategy will depend on your individual parameters. Don’t forget about reserves either — 30-40% of funds in $ or stablecoins, depending on the market phase, will ensure your financial mobility.

There is no clear definition of how much you should invest in altcoins. You can start with any amount, but we do not recommend investing all or most of your funds at the beginning. It is best to allocate a small amount to gain first experience, conduct your own analysis and make your first purchase.

We recommend that you approach this issue responsibly, taking into account the above recommendations. And also do not forget about learning trading before your first attempts to work on the market.