Original | Odaily Planet Daily ( @OdailyChina )
Author | Fu Ruo ( @vincent 31515173 )
Bitcoin does not seem to be the only one shining; funds are starting to flow into mainstream altcoins.
According to Quantify Crypto data, in the past 24 hours, among the top 200 cryptocurrencies by market cap, 185 tokens have risen, while only 15 tokens have decreased. Among the top 100 cryptocurrencies by market cap, the increase has exceeded 8%, with ETH breaking 3400 USDT, a 24H increase of 9.7%; SOL breaking 260 USDT, reaching a new historical high; Ethereum layer 2 OP and ARB both increasing by over 15%. On social media, many investors are exclaiming that the 'altcoin season' has finally arrived.
Has the altcoin season arrived? Odaily Planet Daily will explain the reasons for the price rebound of altcoins and analyze whether it can be sustained. (Note: The author separates on-chain memes from the altcoin category, considering memes listed on leading exchanges as altcoins.)
Why are altcoins rising?
The trading volume of well-known on-chain memes has decreased, and community discussions have diminished.
Previously, as Bitcoin prices continuously broke new highs, altcoins did not rise but fell, leading to a general pessimism towards this round of bull market for altcoins, especially for some VC tokens facing large-scale unlocks.
Therefore, the market's attention has turned to launching a fairer meme section, with most funds going on-chain for PVP. The once mainstream altcoins have significant market value but their liquidity is even lower than that of a recently exploded meme project. For example, the daily trading volume of tokens in the top 100 by market cap is even lower than that of the recently popular CHILL GUY.
However, the high-intensity PVP of memes also makes people hesitant, and the return of funds to altcoins has become inevitable, leading to a rotation of funds between memes and altcoins. One of the reasons for the rise of altcoins this time is the decline in the popularity of on-chain memes, among which:
The trading volume of well-known meme coins has begun to decline, such as ai16z, RIF, and ELIZA (both uppercase and lowercase). These were previously representative of the highly popular meme coins. According to GMGN data, most of the trading volume has now halved.
The discussion and sentiment in the meme community have decreased. In some meme groups I belong to, the discussions have shifted from which project to chase to how to persist and wait for the next wave of meme trends.
SEC Chairman Gary Gensler is about to leave, triggering a celebration among altcoins.
Since the approval of Bitcoin and Ethereum spot ETFs, the cryptocurrency market has been continuously rising, and the market is also looking forward to the next cryptocurrency to go mainstream.
Today, Bloomberg senior ETF analyst James Seyffart stated: 'Cboe has submitted applications for 4 Solana spot ETFs to the SEC, with the issuers being VanEck, 21Shares, Canary Capital, and Bitwise. If the SEC does not reject these document applications, the final deadline will be around early August next year.'
The application for a cryptocurrency spot ETF requires issuers to prepare two documents, namely S-1 and 19b-4. This time it is the S-1 document, representing the application for the listing of the SOL spot ETF. The documents that truly face review difficulties are mostly concentrated in 19b-4, so currently the SOL spot ETF is just getting started.
However, SEC Chairman Gary announced on platform X that he will officially resign on January 20. The new SEC chairman may expedite the review process for the SOL spot ETF, possibly not extending to the final deadline like the previous Bitcoin and Ethereum ETFs.
In addition, Gary's impending departure has also provided a breather for heavily regulated altcoin projects. Ripple, which has always had grievances with the SEC, saw its token XRP increase nearly 30% in a single day.
With the push from regulators and the SOL spot ETF, the rise of altcoins is also reasonable.
Can altcoins continue to rise?
Can the rise of altcoins be sustained? More dimensions of observation and verification are still needed.
Moreover, based on historical experience, the altcoin market often accompanies short-term heat-driven trends, but whether price increases can truly be sustained depends on the project's long-term development capabilities and the overall market environment. Although there are calls for an 'altcoin season' in the current market, if there are no new technological breakthroughs, practical applications, or ecological development support, this trend may largely be a game of brief capital rotation rather than a trend-driven rise.
Therefore, whether for institutions or individual investors, it is necessary to remain vigilant in the face of this wave of altcoin trends. On one hand, attention should be paid to changes in capital flow in the market, such as key indicators like on-chain token transfer data; on the other hand, it is important to guard against the risk of a pullback after short-term gains, especially as the capital movements of leading projects may become an important trend indicator for subsequent market conditions.
Currently, the 'altcoin season' remains a battlefield of opportunities and risks, and investors should stay calm.
