Bitcoin does not seem to be the only star; funds are starting to flow into mainstream altcoins.
According to Quantify Crypto data, in the past 24 hours among the top 200 cryptocurrencies by market capitalization, 185 tokens have risen, while only 15 tokens are in decline. Among the top 100 tokens by market capitalization, the increase exceeded 8%, with ETH breaking 3400 USDT, a 24H increase of 9.7%; SOL breaking 260 USDT, hitting a historical high; Ethereum Layer 2 OP and ARB both rising over 15%. On social media, many investors are calling that the 'altcoin season' has finally arrived.
Has the altcoin season arrived? Odaily Planet Daily will explain the reasons for the rise in altcoin prices and analyze whether it can be sustained. (Note: The author separates on-chain memes from the altcoin category, categorizing memes listed on top exchanges as altcoins.)
Why are altcoins rising?
The trading volume of well-known on-chain memes has decreased, and community discussion levels have also lowered.
Previously, Bitcoin prices kept breaking new highs, while altcoins fell instead of rising, leading to a generally pessimistic outlook on this round of altcoin bull market, especially for some VC coins facing massive unlocks.
Therefore, the market's focus has shifted towards launching a fairer meme segment, with most funds going on-chain for PVP, as past mainstream altcoins have high market capitalizations but their liquidity is not even as good as a recently exploded meme project. For example, currently, the daily trading volume of the top 100 tokens is even less than that of the newly popular CHILL GUY.
However, the high-intensity PVP of memes also deters people, making it inevitable for funds to return to altcoins, and meme coins and altcoins start to rotate funds. The rise of altcoins this time is partly due to the decline in the heat of on-chain memes, including:
The trading volume of well-known meme coins has started 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 now been halved.
The level of discussion and sentiment in the meme community is declining. In some meme groups I belong to, discussions have shifted from which projects to chase to how to persist and wait for the next wave of meme market.
SEC Chairman Gary Gensler is about to resign, bringing a frenzy to altcoins.
Since the approval of Bitcoin and Ethereum spot ETFs, the cryptocurrency market has started to rise continuously, and the market is also looking forward to the next cryptocurrency that will become mainstream.
Today, Bloomberg senior ETF analyst James Seyffart stated: 'Cboe has submitted applications for 4 Solana spot ETFs to the U.S. SEC, issued by VanEck, 21 Shares, Canary Capital, and Bitwise. If the SEC does not reject these filings, the final deadline will be around early August next year.'
The application for cryptocurrency spot ETFs 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 to be listed. The documents facing real review difficulties are mostly concentrated in 19b-4, so 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 new SEC chairman may expedite the review process for the SOL spot ETF, and it may not have to extend to the final deadline like the previous Bitcoin and Ethereum ETFs.
Moreover, Gary's impending departure has also given a breather to altcoin projects that have suffered from regulation. Ripple, which has always had a complicated relationship with the U.S. SEC, saw its token XRP rise nearly 30% in a single day.
Under the impetus of regulatory bodies 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, altcoin trends are often driven by short-term hype, 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 may be more of a game of short-term fund rotation rather than a trend-driven increase.
Therefore, both institutions and individual investors need to remain vigilant in the face of this round of altcoin market. On one hand, they should pay attention to changes in fund flows 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 the fund movements of leading projects could become important indicators for subsequent market trends.
At present, the 'altcoin season' is still a battleground of opportunities and risks, and investors should remain calm.
[Disclaimer] The market is risky, and investment requires caution. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this carries personal responsibility.
