Glassnode’s lead analyst, James Check, says the much-anticipated altcoin season will not occur as expected. He blames the overenthusiasm among new crypto traders for this delay.
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Expounding his theory, Check stated that new crypto traders rush to buy speculative assets too soon. He compared new traders’ altcoin rush to telling a joke where everyone already knows the end, making it lose its charm.
Check’s analysis focused on traders’ behavior and its implication for an altcoin rally in the crypto market.
Crypto Traders Attempted to Outsmart the Market Cycle
James Check shared his thoughts on the Rough Consensus podcast with Joe Carlasare, in which he addressed various crypto-related issues.
He analyzed trader behavior in 2021 and compared it to the 2024 market cycle. He claims traders attempted to outsmart market cycles by quickly buying the most popular memecoins.
Historical data reveals that the past bull runs memecoins often rallied towards the end of the general rally. However, these memecoins rally sooner in the current market cycle, confirming the changing trend.
Check noted that in 2021, the market rally started with Bitcoin and flowed to Ethereum, L1s, DeFi, and monkey JPEGs.
Further, he said the current crypto narrative is to make the most money by buying the “most stupid coins” available. Check also noted that the approval of Spot Bitcoin ETFs forced a market rally, and traders rushed into memecoins.
Traders Sentiment Moved to PEPE
The Glassnode analyst revealed that traders opted to invest in PEPE rather than buying utility tokens or other assets with higher risk. Consequently, PEPE recorded massive gains in the first half of 2024, with few traders capturing massive profits.
For instance, On May 15, one trader captured a massive profit of $46 million, a 15,718% increase on his investment of $3,000.
Earned more than $46M on $PEPE with only $3K, a gain of 15,718x!😱
This super big winner sold 255B $PEPE($2.3M) for profits again after the price of $PEPE increased.
He spent only $3K to buy 4.9T $PEPE($56M currently) on Apr 15, 2023, and sold 1.41T $PEPE for $7.4M, with 3.5T… pic.twitter.com/VKGxmK9gCt
— Lookonchain (@lookonchain) May 15, 2024
Memecoins such as PEPE and Dogiwifhat (WIF) rallied during the first half of the year. However, the analyst stated that there was a gap in the middle of the market where no investor backed any asset.
This means investors focused on memecoins, neglecting traditional altcoins from the accumulation frenzy. As a result, altcoins were left out when meme coins rallied. Nonetheless, some traders and market analysts believe a price drop for altcoins and low trading volume is a bullish signal.
Analysts Provide Altcoin Market Forecasts
Analyst Luke Martin claimed that altcoins are at the “sell your house to buy more” level, which means they are in a major accumulation phase.
Altcoins currently at the “sell your house to buy more” level.
Last time $BTC was at this level was exactly 4 years ago in the summer of 2020 when price went vertical from 10k to 60k over the next 6 months.
h/t @CryptoKoryo pic.twitter.com/vwaGkGE1FA
— Luke Martin (@VentureCoinist) August 27, 2024
Martin noted that the last time Bitcoin was at this level in a market cycle was four years ago, in the summer of 2020.
BTC’s price spiked from $10,000 to $60,000 over six months. The altcoin buy signal chart shows traders’ activity when the general altcoin market displays a buy signal.
Similarly, crypto trader Mags revealed that the altcoin market cap is forming a falling wedge pattern. The falling wedge pattern is a bullish continuous pattern suggesting further price increases.
#Altcoin marketcap is forming a falling wedge pattern, which is a bullish continuation pattern.
Breakout is going to trigger a nice upside rally. pic.twitter.com/vW8xTihLf6
— Mags (@thescalpingpro) August 28, 2024
Mags believes a breakout from the falling wedge will trigger a strong rally for the entire altcoin market. Meanwhile, analyst Michaël van de Poppe noted that the altcoin market capitalization is down 47% from previous highs. However, he believes there is much potential for altcoins despite market conditions.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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