Bitcoin does not seem to be the only star; funds are beginning to flow into mainstream altcoins.
According to Quantify Crypto data, in the past 24 hours, 185 out of the top 200 cryptocurrencies by market cap have risen, with only 15 experiencing declines. Among the top 100 cryptocurrencies by market cap, the increase exceeded 8%, with ETH surpassing 3400 USDT, a 24-hour increase of 9.7%; SOL exceeded 260 USDT, reaching an all-time high; Ethereum Layer 2 tokens OP and ARB both increased by over 15%. Many investors on social media are exclaiming that 'the altcoin season' has finally arrived.
Why are altcoins rising?
The trading volume of well-known on-chain memes is declining, and community discussion levels have decreased.
Previously, Bitcoin's price kept breaking new highs, while altcoins fell instead of rising, leading to a general pessimism about this round of the bull market for altcoins, especially for some VC coins facing large-scale unlocks.
Therefore, the market's attention has turned to launching a more equitable meme sector, with most funds moving on-chain for PVP, while former mainstream altcoins have significant market caps but lack liquidity compared to a newly emerged meme project. For instance, the daily trading volume of the current top 100 tokens is even less than that of the recently popular CHILL GUY.
However, the high-intensity PVP of memes also makes people hesitate, and the return of funds to altcoins becomes inevitable, with meme and altcoins starting to rotate funds. One reason for this rise in altcoins is the decline in the heat of on-chain memes, among which:
The trading volume of well-known meme coins has begun to decline, such as ai16z, RIF, and ELIZA, which were previously popular meme coin representatives. According to GMGN data, most of the trading volume has been halved.
The level of discussion and sentiment in the meme community has decreased. The meme groups I am in have shifted from discussing which projects to chase to discussing how to patiently await the next meme market.
SEC Chairman Gary Gensler is about to leave office, and altcoins are experiencing a celebration.
Since the approval of spot ETFs for Bitcoin and Ethereum, the cryptocurrency market has started to rise continuously, and the market is looking forward to the next cryptocurrency that will go mainstream.
Today, Bloomberg senior ETF analyst James Seyffart stated: 'Cboe has submitted applications for 4 Solana spot ETFs to the SEC, with issuers being VanEck, 21 Shares, Canary Capital, and Bitwise. If the SEC does not reject the above filings, 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 filing for the SOL spot ETF demand listing, while the documents facing review difficulties are mostly concentrated in the 19b-4, so the SOL spot ETF is only just beginning.
However, SEC Chairman Gary announced on platform X that he will officially leave office on January 20. The new SEC chairman may accelerate the review process for the SOL spot ETF, possibly not extending it to the final deadline like the previous Bitcoin and Ethereum ETFs.
In addition, Gary's impending departure has given a respite to heavily regulated altcoin projects. Ripple, which has had a contentious relationship with the SEC, saw its token XRP rise nearly 30% in one day.
With the push from regulatory bodies and the SOL spot ETF, it is reasonable for altcoins to experience an increase.
Can altcoins continue to rise?
Whether the rise of altcoins can be sustained still requires observation and verification from multiple dimensions.
Additionally, from historical experience, the altcoin market often accompanies short-term heat-driven movements, but whether it can truly maintain price increases depends on the project's long-term development ability and the overall market environment. Although there are calls for an 'altcoin season' in the current market, if there is a lack of new technological breakthroughs, practical applications, or ecosystem development support, this market trend may be more of a game driven by temporary fund rotations rather than a trend-based increase.
Thus, for both institutions and individual investors, it is important to remain vigilant in the face of this round of altcoin market. On one hand, attention should be paid to changes in the flow of funds in the market, such as key indicators like on-chain token transfer data; on the other hand, it is also necessary to guard against the risk of pullbacks after short-term gains, especially since the funding movements of leading projects may become an important barometer for subsequent market trends.
At the moment, the 'altcoin season' remains a battlefield of opportunities and risks, and investors should remain calm.
