Crypto Analysts Warn Speculative Memecoins May Delay Anticipated Altcoin Season
As the crypto market eagerly awaits a potential altcoin season, some analysts are cautioning that the current investor behavior could disrupt the expected market dynamics.
According to Glassnode's lead analyst, James Check, many new crypto traders are rushing to buy the most speculative memecoins, rather than building positions in riskier but potentially more lucrative altcoin projects.
"The joke has been told, everybody knows the punchline, and they've just gone straight to the punchline, and it is just not funny anymore," Check said in a recent episode of the Rough Consensus podcast.
Traditionally, memecoins would see their biggest gains toward the end of a broader market rally. However, Check noted that this pattern has shifted, with speculative assets like PEPE token surging earlier in the current cycle.
The analyst explained that the approval of spot Bitcoin exchange-traded funds back in January has contributed to this trend, as traders have been quick to capitalize on the resulting uptick in Bitcoin prices by pivoting to memecoins.
PEPE, for instance, has posted staggering gains throughout 2024, with one savvy trader even making a profit of $46 million, a whooping 15,718-fold return on a $3,000 investment. But Check warned that this has come at the expense of trading activity in other altcoin sectors.
"There was this gap in the middle where no one touched anything," the analyst said.
While Check's observations suggest a potential delay in the much-anticipated altcoin season, not all market participants share the same outlook. Some traders, such as Luke Martin, see the dwindling altcoin prices and lower trading volumes as a bullish signal, drawing comparisons to Bitcoin's strong performance in the second half of 2020.
