The wind finally blows to the altcoins.
Recently, the crypto market has ushered in a wave of strong altcoins. As BTC and meme sectors adjust, market funds flow to Ethereum ecosystem tokens and unpopular old altcoins. In this wave of market, long-dormant old currencies such as XRP, ADA, XLM, and EOS have seen particularly significant increases, among which XRP has even re-entered the top three in market value, with a total market value of up to $250 billion, triggering market fomo.
StarEx exchange analysts believe that the outbreak of old-brand altcoins has the following notable characteristics:
Long bottom consolidation period: These currencies have experienced a long period of bottom shock, during which there was a lack of hot spots and concept speculation. Investors gradually lost patience and a large number of retail investors lost their chips.
High concentration of chips: As retail investors withdraw, the chips of these currencies are concentrated in the hands of a few large funds, and the dealer has a high degree of control. This means that even if the market value is large, the resistance to pull up is relatively small.
Valuation repair demand: After the surge in BTC and meme sectors, there was an obvious demand for capital rotation in the market, which provided an opportunity for the rise of old-fashioned altcoins.
When will this round of copycat season end? What signals will it send?
StarEx exchange analysts believe that the current market rotation has covered BTC, meme coins, Ethereum ecological tokens and old unpopular altcoins. Does it mean that the altcoin season is coming to an end? From historical experience, the rise of unpopular coins often indicates an increase in market risks for the following reasons:
Fund rotation is coming to an end: Market funds are gradually flowing to unpopular old coins, probably because the profit space of popular sectors has been compressed, and funds need to find short-term opportunities. Usually, this kind of rotation is the last stick of the market.
Lack of ecological narrative support: This round of altcoin season lacks clear ecological narrative support, and the rise of many currencies is driven only by funds. Compared with the previous round, the number of currencies and overall market value in the current market have increased significantly, making it difficult for funds to cover all aspects.
Short-term risks increase: The rapid rise of established currencies attracts attention, but it is also easy to aggravate market volatility. The speed of capital inflow and outflow is accelerating, and the wind comes quickly and goes quickly.
Nevertheless, analysts at StarEx Exchange believe that the end of the market does not entirely depend on whether the fund rotation is completed, but also requires the promotion of external events. For example, obvious bad news or large-scale short squeeze in the contract market may become the end signal of the cottage season.
In the face of the rapid rise of old-brand altcoins, we still need to remain rational. For currencies with large short-term gains, we can consider gradually reducing positions, locking in profits, and avoiding the risks of chasing high prices. According to historical data, the duration of the altcoin season is usually several weeks. StarEx Exchange analysts believe that the current wave of market conditions is expected to have opportunities in the next half month, but as Christmas approaches, U.S. stocks may be under pressure, and the crypto market also has certain drag risks. Ethereum ecological tokens deserve more attention. With the continued inflow of ETH-related ETF funds, the single-day net purchase volume last Friday hit a record high, indicating that institutional funds are deploying Ethereum. Compared with old unpopular coins, the gains of these tokens are relatively mild, and there is still room for upward movement in the future, and the ecological narrative still exists.
StarEx exchange analysts believe that the current market correction may be a good opportunity to invest in high-quality altcoins. In particular, Ethereum ecosystem tokens, whose technological innovation and application scenarios make them valuable in the long term. At the same time, as funds gradually flow back from BTC and meme coins, market sentiment may turn to these potential currencies again.
