Altcoin Rotation

Definition ∞ Altcoin Rotation describes a market phenomenon where investor capital shifts sequentially from one altcoin to another. This movement often follows a pattern where certain categories or individual altcoins experience periods of rapid price appreciation, followed by a decline as funds are reallocated to other assets perceived to have greater near-term potential. It is a strategic reallocation of risk capital within the broader cryptocurrency market.
Context ∞ Observing Altcoin Rotation is critical for traders and analysts seeking to identify emerging market trends and potential investment opportunities. News reports often analyze these rotations to explain sudden price surges or declines in specific altcoins, providing insight into market psychology and the flow of speculative capital across different digital asset classes.