Original | Odaily Planet Daily (@OdailyChina)
Author | Golem (@web3_golem)
On November 6, the highly anticipated US election finally concluded, with Republican presidential candidate Trump declaring victory in the 2024 presidential election. Trump has been dubbed the 'crypto president' for his repeated public promises to support the development of the crypto industry once in office. Following Trump's victory, Bitcoin hit a historic new high on election day, briefly exceeding $75,000, and peaked at $76,848 early this morning, setting a new record.
As of the writing of this article, according to CoinGecko and TradingView data, the total market capitalization of cryptocurrencies is $2.672 trillion, with Bitcoin's market share at 59.86%. Although Bitcoin's market share remains high, the altcoin market has also started to warm up this month. According to Quantify Crypto data, in the past week, among the top 200 cryptocurrencies by market capitalization, aside from BTC, 173 tokens have seen an increase, including SOL up over 17%, DOGE up over 20%, UNI up over 14%, and LDO up over 22%.
So, can the bullish trend of the altcoin market continue after November? Which altcoins are worth paying attention to? Odaily Planet Daily will attempt to analyze the current favorable factors for the altcoin market in this article, while also gathering various institutions' views on the future of the altcoin market, and finally consider which altcoins are worth focusing on from a trading perspective.
With Trump's administration, the altcoin market may welcome a regulatory spring.
With Trump's election as the next President of the United States, both the traditional financial market and the crypto market have begun to digest Trump's electoral victory.
In the traditional financial market, the dollar and US debt soared due to the election results, but plans previously mentioned by Trump to reduce immigration, broadly impose tariffs, and cut taxes could push inflation higher, causing gold and oil prices to fall after the election results were announced.
In the crypto market, Bitcoin's price was the first to react directly to Trump's victory, setting new highs continuously. During his campaign, Trump made numerous promises to the crypto industry, including not supporting CBDCs and establishing a national Bitcoin reserve (see details in the image below). For the altcoin market, which faces stricter regulations, if these crypto-friendly regulatory policies can be continuously implemented, it will truly promote the recovery of the altcoin market.
In 2024, the 'number one enemy' of the crypto industry, the SEC, has imposed fines amounting to $4.68 billion on the crypto sector, with several crypto companies being accused by the SEC, including Binance, Coinbase, ConsenSys, and Uniswap. After Trump takes office, the SEC's vigilance towards the crypto industry is likely to relax significantly.
On November 6, cryptocurrency-supporting Republican Bernie Moreno defeated Ohio Democratic Senator Sherrod Brown to successfully obtain a Senate seat in Ohio, giving Republicans control of the Senate. To help Bernie Moreno secure this seat, the cryptocurrency-supporting super PAC 'Defend American Jobs' spent $40.1 million in support.
The reason this seat has attracted so much attention in the crypto space is that Brown currently holds the position of chairman of the Senate Banking Committee, which is one of the most influential committees in the Senate, having jurisdiction over the SEC and CFTC. Therefore, the inauguration of crypto-friendly Bernie Moreno is expected to facilitate the passage of numerous cryptocurrency-related bills.
At the same time, the current chairman of the SEC, Gary Gensler, will also be replaced, and Trump may appoint a 'crypto-friendly chairman'... (Related reading: Who will be the new SEC chairman after Gary Gensler?)
The above regulatory trends indicate that after the Trump administration took office, the regulatory pressure faced by the altcoin market will improve, ushering in a regulatory spring.
Bitcoin hits a new high; the chances of altcoin rotation are high.
As Bitcoin breaks new highs and maintains a market share of around 60%, based on past bull market experiences, when Bitcoin's market share remains at a high of 60%, the altcoin season is likely to arrive soon. Compared to previous cycles, the general consensus in this round is that the Bitcoin spot ETF has brought in significant capital inflows and institutional purchases, which is one of the main factors affecting Bitcoin's price increase.
According to Grayscale's October crypto report, in October, the net inflow of US spot Bitcoin exchange-traded products (ETPs) totaled $5.3 billion, the highest level since February, with total net inflow exceeding $24.2 billion. US ETPs currently hold about 5% of Bitcoin's total supply.
However, it also noted that due to the existence of Bitcoin 'basis trading', where buying Bitcoin (through ETP) is accompanied by selling Bitcoin (through futures), the inflow of spot Bitcoin ETPs does not have as large an impact on Bitcoin prices as previously imagined. Grayscale estimates that of the $24.2 billion net inflow into US ETPs, about $5 billion (approximately 20%) may be used for pairing spot/futures positions.
Therefore, aside from traditional financial market funds such as Bitcoin spot ETFs and institutional purchases, there are still many active crypto funds or retail funds in the market that are pushing Bitcoin's price up. As Bitcoin hits new highs and the regulatory environment for crypto may shift with Trump's administration, these funds are more likely to rotate into the altcoin market, ushering in the altcoin season.
How do various institutions view the future trends of altcoins?
Previously, multiple institutions remained pessimistic about the future trends of the altcoin market, believing that Bitcoin would absorb a large amount of crypto funds.
Top trader Eugene stated at the end of October on platform X that the price movements in October truly showcased the current crypto environment's PvP level, indicating that despite traditional financial funds flowing into Bitcoin purchases, no one has been buying altcoins yet. Users can make money in some areas (like GOAT and early AI Meme), but they can also easily hand all profits back to the market due to later panic buying.
Matrixport stated on November 5 that under multiple positive factors, Bitcoin's market share rose from 50% to 60%, but altcoins are constrained by declining user activity and token unlock pressure, contrasting sharply with the explosive growth during the DeFi boom of 2020-2021, as investors are gradually shifting their crypto assets to Bitcoin.
Bitfinex analysts also stated that there has been a cooling trend in the altcoin market, and the speculative interest that once supported altcoins seems to have disappeared, reflecting stable funding rates and an overall low market sentiment. As Bitcoin has absorbed most of the funds flowing into the crypto asset space, the short-term recovery prospects for altcoins look minimal without new catalysts.
However, there are also opinions that funds will eventually rotate to the altcoin market.
HashKey Group's chief analyst Jeffrey Ding analyzed that Trump's election has been seen as the 'starting gun' for the cryptocurrency market, and it is expected that the digital currency market will continue to digest this positive news until Trump moves into the White House. A series of supportive policies for the cryptocurrency industry that Trump promised during his campaign, including incorporating Bitcoin into the national reserve and replacing the current SEC chairman Gary Gensler, are viewed as significant positives for the market. Given that Trump is known for 'keeping campaign promises', we have reason to expect these policies to be gradually implemented after he takes office. The expected implementation of these policies, combined with the high probability of Trump's election, provides strong support for the price increases of Bitcoin and other cryptocurrencies.
Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom, stated on the Unchained podcast on November 1 that while liquidity will flow into Bitcoin after the election, if Bitcoin rises, the percentage increase of other currencies will be greater. This is because people often fall into the 'nominal price fallacy', believing that if Bitcoin is $72,000, then buying a coin worth $1 seems cheaper, thinking it has more room to rise. This mentality can lead investors to buy those coins that appear cheap, forming what is known as the 'rotation effect.'
GSR analysts state that the election will not overly affect Bitcoin, but from the perspective of altcoins, many projects have been waiting for the right opportunity, observing the issuance of other tokens and the election results. When project parties are unsure whether the tokens they intend to deploy might be sued by the SEC within two months, few are willing to launch coins now. If the election results are favorable for improving crypto regulation, it will enhance this situation.
Matt Hougan, Chief Investment Officer of Bitwise, pointed out before the election concluded that regardless of whether Trump or Harris won, the regulatory environment for Bitcoin was improving, and if Trump won, it would have a greater impact on Ethereum and other altcoins. Benjamin Cowen, founder of Into The Cryptoverse, also stated on November 4 that the liquidation of altcoins should end by December 2024 (at the latest by the second week of January 2025).
Review of oversold altcoins
Looking at the performance of altcoins over the past two days, the market leans towards a more optimistic view. However, although some altcoins have rebounded, considering the long-term market trends for altcoins and Bitcoin's current market movements, many altcoins are still in the 'ankle chop' stage. Among the projects newly launched on Binance in 2024, many altcoins have experienced pullbacks exceeding 80% from their highs. Therefore, from a trading perspective, if the altcoin market arrives, these oversold altcoins will have greater chances of rebounding.
Below is a brief overview of some altcoins that were newly launched on Binance in 2024 but experienced significant pullbacks from their highs: (Data as of November 7)
Starknet (STRK)
Sector: L2
Launch date: 2024-2-20
Pullback from high: -85%
Sleepless AI (AI)
Sector: GAMEFI, AI
Launch date: 2024-1-8
Pullback from high: -84%
AltLayer (ALT)
Sector: Modular Blockchain
Launch date: 2024-1-25
Pullback from high: -85%
Pyth Network (PYTH)
Sector: Oracles, SOL ecosystem
Launch date: 2024-2-2
Pullback from high: -67%
IO.NET (IO)
Sector: AI
Launch date: 2024-6-11
Pullback from high: -72%
Dogwifhat (WIF)
Sector: SOL MEME
Launch date: 2024-3-5
Pullback from high: -52%
AEVO (AEVO)
Sector: DEX
Launch date: 2024-3-13
Pullback from high: -91%
Ethena (ENA)
Sector: Synthetic Stablecoins
Launch date: 2024-4-2
Pullback from high: -65%
Dogs (DOGS)
Sector: TON, MEME
Launch date: 2024-8-30
Pullback from high: -65%
Hamster Kombat (HMSTR)
Sector: TON, GameFi
Launch date: 2024-9-26
Pullback from high: -63%
The above is just a selection of some oversold altcoins as examples. The altcoin market has experienced a long decline, while Bitcoin has continued to rise. In the short term, there are many opportunities in the altcoin market. However, not all players have the time to carefully analyze the altcoin market and find profitable opportunities when the altcoin season arrives. Therefore, Odaily Planet Daily has recently developed a short-term token selection robot - Golden Ape to help users solve this problem.
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Interested friends, quickly join Odaily's Golden Ape TG community to explore the market together, discover, and lock in valuable targets.
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