Original | Odaily Planet Daily (@OdailyChina)
Author | Fu Howe (@vincent 31515173)
Bitcoin does not seem to be the only one that is doing well, and funds are beginning to flow into mainstream altcoins.
According to Quantify Crypto data, 185 of the top 200 cryptocurrencies by market value rose in the past 24 hours, and only 15 fell. The top 100 cryptocurrencies by market value rose by more than 8%, with ETH breaking through 3,400 USDT, up 9.7% in 24 hours; SOL breaking through 260 USDT, a record high; Ethereum's second-layer OP and ARB both rose by more than 15%. On social media, many investors said that the "copycat season" has finally arrived.
Has the altcoin season arrived? Odaily Planet Daily will explain the reasons for the altcoin price rebound and analyze whether it can continue. (Note: The author separates the memes on the chain from the altcoin team, and the memes listed on the top exchanges are classified as altcoins.)
Why are altcoins rising?
The transaction volume of well-known memes on the chain has decreased, and the community discussion has decreased
Previously, the price of Bitcoin continued to break new highs, while altcoins fell instead of rising, which also led to the market generally not being optimistic about altcoins in this bull market, especially some VC coins that were facing large-scale unlocking.
Therefore, the market is looking to launch fairer meme sectors, and most funds are going to the chain for PVP. The mainstream altcoins of the past have a large market value, but their liquidity is not as good as a meme project that has just exploded. For example, the daily trading volume of the top 100 tokens in terms of market value is not even as good as that of the newly popular CHILL GUY.
However, the high intensity of PVP in meme also discourages people, and it is inevitable that funds will return to altcoins, and meme and altcoins begin to rotate funds. The rise of altcoins this time is partly due to the decline in the popularity of memes on the chain, including:
- The trading volume of well-known meme coins has begun to decline, such as ai16z, RIF, uppercase and lowercase ELIZA, etc. These are representatives of meme coins that were previously popular. According to GMGN data, most of the trading volumes have been halved.
- The discussion and sentiment of the meme community has declined. Some of the meme groups I belong to have changed from discussing which projects to invest in to discussing how to wait for the next wave of meme market.
SEC Chairman Gary Gensler is about to leave, and altcoins are having a carnival
Since the approval of Bitcoin and Ethereum spot ETFs, the crypto market has continued to rise, and the market is also looking forward to the next cryptocurrency to go mainstream.
Today, Bloomberg senior ETF analyst James Seyffart wrote: "Cboe has submitted applications to the US SEC for four Solana spot ETFs, the issuers are VanEck, 21Shares, Canary Capital and Bitwise. If the SEC does not reject the above application, 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, which represents the document required for the SOL spot ETF to be listed. The documents that really face review difficulties are mostly concentrated in 19b-4. Therefore, the SOL spot ETF is just getting started.
However, SEC Chairman Gary announced on the X platform that he would officially resign on January 20. The new SEC Chairman may speed up the review of the SOL spot ETF, and it may not have to be extended to the final deadline like the previous Bitcoin and Ethereum ETFs.
In addition, Gary's upcoming departure also gave the heavily regulated altcoin projects a respite. Ripple, which has always had a grudge with the US SEC, saw its token XRP rise by nearly 30% in a single day.
With the support of regulation and SOL spot ETF, it is reasonable for altcoins to rise.
Can altcoins continue to rise?
Whether the rise of altcoins can continue still requires observation and verification from more dimensions.
In addition, from historical experience, the market of altcoins is often driven by short-term popularity, but whether the price can be truly maintained depends on the long-term development ability of the project and the coordination of the overall market environment. Although there are calls for a "altcoin season" in the current market, if there is a lack of new technological breakthroughs, application landing or ecological development support, this wave of market may be more of a game of short-term capital rotation rather than a trend of increase.
Therefore, both institutional and individual investors need to remain vigilant in the face of this round of altcoin market. On the one hand, we need to pay attention to changes in the flow of funds in the market, such as key indicators such as on-chain token transfer data; on the other hand, we also need to guard against the risk of a correction after a short-term increase, especially the capital flow of the leading project parties may become an important indicator of the subsequent market.
At present, the "copycat season" is still a game field where opportunities and risks coexist, and investors should remain calm.
