Original | Odaily Planet Daily (@OdailyChina)
Author | Fu Ruo He (@vincent 31515173)
The cryptocurrency market seems to no longer be dominated solely by Bitcoin, as funds are flowing towards mainstream altcoins.
According to Quantify Crypto data, in the past 24 hours, among the top 200 cryptocurrencies by market capitalization, 185 tokens rose, while only 15 tokens were in a downtrend. Among the top 100 tokens by market capitalization, the general increase exceeded 8%, with ETH breaking 3400 USDT, and a 24-hour increase close to 10%; SOL breaking 260 USDT, reaching a new historical high; Ethereum Layer 2 OP and ARB both exceeding 15% increase. Many users on social media are calling out that the 'altcoin season' has finally arrived.
However, whether the altcoin season has truly arrived is still under discussion. For this, Odaily Planet Daily will explain the reasons for the rebound in altcoin prices and analyze whether it can be sustained. (Note from Odaily Planet Daily: The author separates on-chain memes from the altcoin group, categorizing top exchange memes as altcoins.)
Why are altcoins rising?
The trading volume of well-known on-chain memes is declining, and community discussion has somewhat decreased.
Previously, Bitcoin prices continuously broke new highs, while altcoins not only did not rise but fell, leading some users to be pessimistic about this round of the bull market for altcoins, especially facing large-scale unlocks of VC coins.
Therefore, the market's attention is turning to launching a fairer meme sector, which leads to most funds going to on-chain PVP, while the once-mainstream altcoins are facing a situation where they possess market value but their liquidity is less than that of a recently exploded meme project. For example, currently, the top 100 tokens by market capitalization have a 24-hour trading volume that is even less than that of the recently popular CHILL GUY.
However, the high intensity PVP of meme also deters people, and the return of funds to altcoins is inevitable, gradually evolving into a new mechanism: Bitcoin breaks through first, and funds rotate between meme and altcoins. The rise of altcoins this time is partly due to the decline in on-chain meme popularity, among which:
The trading volume of well-known meme coins has begun to decline, such as ai16z, RIF, and ELIZA, which were previously high-profile meme coin representatives. According to GMGN data, almost all trading volumes have been halved.
Community discussion has decreased. Most meme communities I am in have shifted from discussing which meme projects to chase to now talking about how to patiently wait for the next wave of meme speculation.
The SEC chairman is about to resign, triggering a frenzy in altcoins.
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 going mainstream.
Today, Bloomberg senior ETF analyst James Seyffart published that 'Cboe has submitted applications for 4 Solana spot ETFs to the US SEC, issued by VanEck, 21 Shares, Canary Capital, and Bitwise. If the SEC does not reject the above document applications, the final deadline will be around early August next year.'
The application for cryptocurrency spot ETFs requires the issuer to prepare two documents, namely S-1 and 19b-4. This time it is the S-1 document, representing the filing for the listing of the SOL spot ETF. The truly challenging document for review is mostly concentrated in the 19b-4, so currently, the SOL spot ETF is just getting started.
However, SEC Chairman Gary announced on the X platform that he will officially resign on January 20. The newly appointed SEC chairman may accelerate the review process of the SOL spot ETF, and it may not have to go through the final deadline like the previous Bitcoin and Ethereum ETFs.
In addition, Gary's impending departure has given regulated altcoin projects a breather. Ripple, which has always had a contentious relationship with the US SEC, saw its token XRP rise nearly 30% in a single day.
With the push from regulatory levels and the SOL spot ETF, it is reasonable for altcoins to experience a rise.
Can altcoins continue to rise?
Whether the altcoin frenzy can be sustained still requires more dimensions of observation and verification.
From historical experience, the market for altcoins is often driven by short-term popularity, but whether they can truly maintain price increases 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 of a game of funds briefly rotating rather than a trend-driven rise.
Therefore, both institutions and individual investors need to remain vigilant in the face of this round of altcoin market activity. On one hand, they should pay attention to changes in the flow of funds in the market, such as key indicators like on-chain token transfer data; on the other hand, they also need to guard against the risk of pullbacks after short-term gains, especially since the funding direction of leading projects may become an important indicator for subsequent market trends. For now, the 'altcoin season' is still a battleground of opportunities and risks, and investors should remain calm.
