Why Crypto Portfolio Allocation Should Change During Bull Markets

Most investors focus on buying the right assets, but few pay attention to how their portfolio allocation should evolve during a bull market. The reality is that bull cycles have predictable phases, and adjusting your allocation at the right time can dramatically improve long-term returns while reducing unnecessary risk.

In the early stages of a bull market, Bitcoin dominance typically rises. Capital flows into BTC first because it’s the safest and most recognized asset. During this phase, having a higher BTC allocation makes sense — it provides stability while still capturing upside. Historical data shows that early bull phases are when Bitcoin outperforms most altcoins.

However, once BTC reaches new highs and begins to consolidate, liquidity starts to rotate into large-cap and mid-cap altcoins. This is where adjusting allocation becomes crucial. Gradually increasing exposure to strong altcoins (ETH, SOL, ecosystem tokens, etc.) allows investors to benefit from the higher volatility and stronger percentage gains that happen in the “altcoin season” phase.

Risk also changes as the bull market matures. Late-stage cycles tend to show extreme volatility and emotional trading, so using strategies like progressive profit-taking, setting allocation ceilings, or rebalancing back into BTC or stablecoins can protect gains without leaving the market entirely.

My view: Bull markets reward adaptability. Investors who adjust allocation based on BTC dominance trends and liquidity rotation historically outperform those who keep a static portfolio. In crypto, timing the phase of the cycle matters almost as much as picking the right assets.

Posted Using INLEO