Talk of the Altcoin season receded, and sentiment switched on social media. The expectation of an overall bull market lifting all assets peaked in the past months. Now, the lack of talk about altcoins may be a signal for a local market bottom.
“Altcoins” are a category that groups all assets and sometimes includes blue chips. Sometimes, Ethereum (ETH) could lead to an Altcoin market.
Bitcoin narrative dominates
Altcoin markets usually follow a Bitcoin (BTC) all-time high, though in 2024, most assets have lagged. There is even less talk of an overall altcoin market, which may signal the low end of market sentiment and a potential price bottom.
🤑 There is a notable trend between the mentions of crypto being an alt season, and markets hitting a top. When traders become greedy, their interests in altcoins rise. After the latest March top, this FOMO has calmed considerably. Crowd fear brings us closer to a bottom. pic.twitter.com/MUjVIXUwBI
— Santiment (@santimentfeed) June 17, 2024
With a BTC dominance of 54.8%, the altcoin market is not that liquid or interesting. Projects have also shown fatigue, and stars from previous market cycles seem forgotten.
New buyers seek ease of access; in some cases, older altcoins require multiple wallets or a learning curve. On the positive side, older altcoins have highly liquid trading pairs. Some are seen as reliable enough to be included in mainstream products and eventual ETF.
Altcoin season is still coming, but not immediately
The consensus is that the next altcoin season may take longer to unroll. For now, there is no inflow of funds to lift all assets. The Bitcoin narrative is also the strongest, and the leading asset offers smaller volatility.
It's #Bitcoin season.#Altcoin falling deeply while #BTC just -2%. pic.twitter.com/XpjZbiIJbn
— SIXPENCE (@sixpenceop) June 18, 2024
In 2024, most older projects built the technology promised during previous bull cycles. However, the underlying tokens are either stagnant or still sliding. One of the reasons is that communities have shifted, and support is concentrating on new classes of coins and tokens.
The meme token sector is also seeing new retail buying. Meme token activity is split into two main types. Highly visible meme tokens like PEPE, SLERF, BOME, FLOKI, and SHIB rely on their communities and a decision to hold for the long term.
Read: Meme tokens: A phenomenon sweeping the crypto market
New meme tokens and one-day sensations rely on quick rug pulls and automated bot trading to find a gem among brand-new tokens with no history. Some are also self-created and pumped by bots, lacking the history and milestones of older altcoin projects.
In 2024, DeFi and the growth in decentralized activity will also be helping. Even with the gains made in Q1, the consensus is that accumulation with further corrections may continue for a few more weeks. However, altcoins still have a chance and technical indicators may bring attention back to them.
#AltcoinsIt has finally happened.The 3W Gaussian Channel has changed from red to green.The last time this happened was in 2020, after which we saw an Altseason lasting several months.My body is so ready.👀🔥 pic.twitter.com/ArTOo2txv1
— 𝕄𝕠𝕦𝕤𝕥𝕒𝕔ⓗ𝕖 🧲 (@el_crypto_prof) June 17, 2024
Altcoins also quickly lose between 10-20% of their value in a single day during market downturns. Some of the years-old projects are just as volatile as meme tokens and are still far from their all-time highs, sparking no hopes of recovery.
Sentiment turned in late May
Overall, social media sentiment shifted in May based on Farcaster discussions. Interest in crypto assets is also trending downward.
Sometimes, traders may look for the market bottom to choose a new entry point. The creator of the Farcaster index claims the chart reflects current and forward-looking sentiment. For traders, a low index means a buying signal, and euphoria is actually a time to make profits.
Some altcoins have also erased all gains and have turned into bear market territory. The latest slide also looks like a capitulation event, essentially restarting accumulation.
Altcoin market down bad – capitulation ⚰️🪦📉Alts reached their cycles lows again, with just a small number of coins which did wellFunding rates negativeSentiment bearish/fearfulGood time to add more to spot bags 🫡#Crypto #Altcoin #Alts #Altcoinmarket pic.twitter.com/orZiXB5bzA
— Trading Joker (@TradingJoker) June 18, 2024
At this stage of the market, it is also easy to note the load-bearing assets and those that at least remain stagnant. Even after the recent slide, ETH, BNB, and TRON remain close to their usual levels. Those assets also serve as safe options in trading pairs. Solana (SOL) is more volatile, sinking to $137.04.
Also read: Crypto analysts forecast Altcoins frenzy – Get ready to diversify
The downturn affected smaller platforms more, with MATIC, NEAR, AVAX and Chainlink (LINK) also losing 6-10%. Previously weak assets like XRP trade in their usual range at $0.49.
Even Cardano (ADA), which has not made significant gains, retained a position at $0.37. Buying any of those assets will not guarantee exposure to an immediate bounce but is seen as a bet on a new wave of hype. Like in older bull cycles, some altcoins never recover and may fade into obscurity with near-zero activity.
Cryptopolitan reporting by Hristina Vasileva
