Article reproduced from: Odaily Planet Daily
Original | Odaily Planet Daily (@OdailyChina)
Author | Fu Ruhe (@vincent 31515173)
Bitcoin does not seem to be the only winner; funds are beginning 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, and only 15 tokens are in a downward state. Among the top hundred cryptocurrencies by market cap, the increase exceeded 8%, with ETH breaking through 3400 USDT, a 24H increase of 9.7%; SOL surpassing 260 USDT, setting a new historical high; and Ethereum layer 2 OP and ARB both exceeding 15% increase. On social media, many investors are calling out that the 'altcoin season' has finally arrived.
Has the altcoin season already arrived? Odaily Planet Daily will explain the reasons for the rebound in altcoin prices and analyze whether it can be sustained. (Note: The author separates the on-chain memes from the altcoin group, categorizing the memes listed on major exchanges as altcoins.)
Why are altcoins rising?
The trading volume of well-known on-chain memes has decreased, and community discussion has somewhat diminished.
Previously, as Bitcoin prices continued to break new highs, altcoins fell instead of rising, leading the market to generally be pessimistic about 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 sector. Most funds are directed towards on-chain PVP, while previously mainstream altcoins have substantial market capitalizations but their liquidity is not even as good as that of a newly popular meme project. For example, currently, the daily trading volume of the top 100 tokens is even less than that of the recently exploded CHILL GUY.
However, the high-intensity PVP of memes also deters people, making it inevitable for funds to return to altcoins, and memes and altcoins begin to rotate funds. One reason for this rise in altcoins is the decline in the popularity of on-chain memes, among which:
The trading volume of well-known meme coins has started to decrease, such as ai16z, RIF, and ELIZA in both uppercase and lowercase, which were previously popular meme coin representatives. According to GMGN data, most of the trading volume has now been halved.
The discussion and sentiment in meme communities have declined. Some meme groups I belong to have shifted from discussing which projects to chase to discussing how to persist and wait for the next wave of meme market.
SEC Chairman Gary Gensler is about to leave, and altcoins are welcoming a carnival.
Since the approval of Bitcoin and Ethereum spot ETFs, the cryptocurrency market has begun to rise continuously, and the market is also 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 U.S. SEC, with issuers being VanEck, 21Shares, Canary Capital, and Bitwise. If the SEC does not reject the aforementioned document applications, the final deadline will be around early August next year.'
The application for a cryptocurrency spot ETF requires the issuer to prepare two documents, namely S-1 and 19b-4. This time it is the S-1 document, representing the request for listing the SOL spot ETF. The documents that truly face audit difficulties are mostly concentrated in 19b-4, so currently, the SOL spot ETF is just getting started.
However, SEC Chairman Gary announced his official departure on January 20 on the X platform. The newly appointed SEC chairman may accelerate the review process of the SOL spot ETF, and perhaps it won't have to extend to the final deadline like the previous Bitcoin and Ethereum ETFs.
In addition, Gary's imminent departure has allowed heavily regulated altcoin projects to catch a breath. Ripple, which has always had a contentious relationship with the U.S. SEC, saw its token XRP rise nearly 30% in a single day.
Under the impetus of the regulatory authorities and the SOL spot ETF, it is reasonable for altcoins to rise.
Can altcoins continue to rise?
Whether the rise of altcoins can be sustained still requires more dimensions of observation and verification.
Additionally, based on historical experience, the market for altcoins often accompanies short-term heat-driven trends, but whether price increases can genuinely be sustained depends on the long-term development capabilities of the projects and the overall market environment. Although there are calls for an 'altcoin season' in the current market, if there are no new technological breakthroughs, application implementations, or ecological development support, this wave of market activity may be more about temporary fund rotation rather than a trend-driven increase.
Therefore, whether for institutional or individual investors, it is necessary to remain vigilant in the face of this wave of altcoin market. On one hand, attention should be paid to the changes in the flow of funds in the market, such as on-chain token transfer data and other key indicators; on the other hand, it is also necessary to guard against the risk of a pullback after a short-term surge, especially the funding trends of leading project parties may become an important barometer for subsequent market trends.
At present, 'altcoin season' remains a battleground of opportunities and risks, and investors should remain calm.
