The total market capitalization of altcoins still needs to increase by about 16% from the current level before the real altcoin season begins; until then, volatility will continue, according to a cryptocurrency trader.
Anonymous cryptocurrency trader Daan Crypto Trades shared in a post on December 28 on X that the 'exuberance' or 'frenzy' phase will begin when TOTAL3 — the total market capitalization of all cryptocurrencies except Bitcoin (BTC) and Ether (ETH) — surpasses the all-time high of $1.13 trillion from 2021 and enters a price exploration phase.
The exuberance phase will not begin until TOTAL3 surpasses the ATH of 2021
According to TradingView data, TOTAL3 is currently at $962.78 billion at the time of publication. This level has increased by about 91.45% since January 1.
'As long as this trade is between about ~$840 billion and ~$1.1 trillion, I think it will not be stable,' Daan said.
He stated that he will be 'more cautious' if TOTAL3 trades below $800 billion.
Some analysts believe that the overall cryptocurrency market has become more volatile due to traders adopting a shorter-term view compared to previous years.
Co-founder of Syncracy Capital, Daniel Cheung, said in a post on X on December 28: 'Everyone suddenly thinks they are George Soros in this cycle and continuously monitor hourly charts to time their entries/exits and play with leverage.'
Cheung believes this is the main reason why cryptocurrency tokens have not seen explosions as 'swiftly as in previous cycles.'
Traders are starting to shift to Altcoin
According to CoinMarketCap data, the top three altcoins with the highest growth among the top 100 cryptocurrencies in the past seven days are Bitget Token (BGB) with an increase of 80.65%, Virtuals Protocol (VIRTUAL) with a 42.30% increase, and Pudgy Penguins (PENGU) with a 31.63% increase.
Meanwhile, with Bitcoin Dominance back near 60% amid slight price stagnation in the last days of 2024, along with growing confidence among traders that it may be time to shift the accumulation strategy to Altcoin.
'At this point, Altcoin offers a much more optimal R/R [Risk/Reward] profile compared to Bitcoin,' anonymous cryptocurrency trader Dyme said in a post on X on December 27, adding:
'The time to DCA Bitcoin has ended in another 1.5+ years,' Dyme said.