1. Bitcoin's growth gradually slows down, and altcoins begin to take over the market
After Bitcoin (BTC) prices have risen for a period of time, the market begins to have a certain "fatigue" with Bitcoin. At this time, Bitcoin's price growth begins to slow down, and the relative performance of altcoins becomes more attractive to investors. Many altcoins begin to break away from Bitcoin's trend and rise separately, attracting more attention.
2. High volatility of altcoins
Altcoins are generally more volatile than Bitcoin. In a bull market, many altcoins will experience very violent price fluctuations, and may even rise several times or even dozens of times in a short period of time. This volatility usually attracts investors seeking high risk and high returns.
3. Market "bubble" phenomenon
Due to the relatively low market value and untapped potential of altcoins, many investors begin to speculatively buy altcoins, hoping to make huge profits in a short period of time. At this time, the market will be full of various seemingly promising projects, especially some altcoins without clear practical applications can also be hyped.
4. Project party's "hype"
In the altcoin bull market, some project parties will use various means to increase the popularity and market attention of their currencies. For example, a large number of marketing activities, discussions on social media, cross-border cooperation, celebrity effects and other means will drive up the price of altcoins. These projects may have some hype, but driven by the bull market, they can often gain a larger market share.
5. The crazy rise of small-cap altcoins
Compared with Bitcoin and mainstream altcoins (such as Ethereum), small-cap altcoins can usually experience more intense gains. Many tokens of emerging projects or technological innovations (such as Layer 2 solutions, cross-chain protocols, etc.) may soar in the short term due to market enthusiasm, attracting a large influx of funds.
6. Exchange support
Many altcoins will be listed on well-known cryptocurrency exchanges (such as Binance, Coinbase, etc.), or quickly gain liquidity in decentralized exchanges (DEX), which will prompt their trading volume and price to grow rapidly. Some projects tend to enter a rapid rise channel after gaining support from mainstream exchanges.
7. Investor FOMO psychology
In the altcoin bull market, FOMO (fear of missing out) psychology is particularly serious. As altcoins soar, investors may blindly follow suit and buy other altcoins in order to catch up with this trend. This speculative behavior often contributes to the formation of market bubbles.