The crypto market's alt season starts off poorly.

For most seasoned crypto traders, the "alt season" is almost a routine cycle. First, Bitcoin rises, triggering a new wave of attention to digital assets in the market. Funds flow into this dominant cryptocurrency, while interest in "altcoins" gradually decreases.

Traders began to look for higher yields elsewhere, leading to new stories and narratives. Subsequently, funds rotated into underperforming altcoins, bringing excess returns, which is also the reason why speculators coined the term "alt season" during the bull market of 2017-2018.

On July 14, driven by the enthusiasm of "crypto week", Bitcoin entered a narrow trading range after reaching a new historical high. Influential figures and investors in the digital asset space have called Ethereum's breakthrough and the rebound of the long-sluggish NFT sector a turning point. However, this cycle has been characterized more by intermittent activity rather than a full-blown alt season. XRP surged over 60% since early July, but fell 11% again on Wednesday.

Many of the most popular altcoins belong to a category of tokens known as "low circulation, high fully diluted valuation (FDV)." These tokens often have a fully diluted valuation in the billions of dollars, but a closer look at their token distribution reveals that only a small portion of the tokens are freely tradable.

This often makes these tokens more susceptible to manipulation in the market. These factors typically come into play in the later stages of a typical alt season — when speculation peaks, market fatigue intensifies, and prices often reverse. Although most crypto traders can now easily identify this pattern, hope still lingers.

The trends in the crypto market are filled with uncertainties and challenges, but they also contain potential opportunities. Investors should fully understand the associated risks when participating in altcoin investments, remain calm and rational, and respond to market changes with a sound strategy!