Altcoins
Will there be an Altcoin season in 2024? Expert analysis
Sentiment around altcoins remains cautious. Although Bitcoin is nearing all-time highs and resurgence of meme pieces, retail interest in altcoins has been muted. Here is an analyst exploring possible flaws in the current altcoin cycle in 2024.
Renowned analyst Miles Deutscher strong points major challenges in the altcoin market in 2024, a stark contrast to the bullish mood of 2021. Many altcoins are underperforming as the Bitcoin price fluctuates, with risks of further declines if major support levels fail.
German government’s plan to sell for $3 billion Bitcoin caused the market to panic, although it did not greatly affect Bitcoin’s daily trading volume. Altcoins like Injective, Stacks, Bunker, Arweave, and Celestia fell significantly, showing overall market weakness influenced by Bitcoin’s dominance.
Proliferation of crypto tokens
Since April 2024, over a million new crypto tokens have been created, many of which are memecoins on the Solana network. Deutscher says this is because it is easy to create new tokens, leading to market saturation and dilution. He likens this flood of new tokens to inflation, explaining that each new token adds more pressure to the market, making existing tokens less valuable.
Impact of venture capital
Deutscher blames venture capitalists for contributing to market imbalances by planning their investments to maximize returns rather than supporting sustainable growth of projects. It explains how venture capital investments, coupled with delays in project launches during bear market conditions, exacerbate token dilution and strain market liquidity. The bias toward private markets creates barriers for retail investors, impacting market sentiment and participation.
How to navigate today’s market
Deutscher recommends focusing on high-quality projects with clear narratives, innovative tokenomics, and strong community support. Projects that differentiate themselves in sectors such as real-world assets (RWA), AI, and gaming will likely fare better amid market volatility. Building strong communities and implementing effective tokenomics strategies, including buybacks and staking, are essential to maintaining long-term investor interest and mitigating market pressures.
On the other hand, analyst Miles Deutscher finds the real world assets (RWA) sector compelling, with plans to accumulate ETH and other altcoins. It recommends a medium to long term perspective (6-12 months or more) to withstand market volatility and use periods of low volatility to accumulate strong altcoins.
Is Altcoin Season Coming?
Despite the current challenges, some investors are seeing bullish signals. Layah Heilpern highlights factors such as Bitcoin and Ethereum ETF Approvals and support from high-profile figures, suggesting the market is ready for a big move. While CryptoQuant CEO Ki Young Ju and technical analyst Mister Crypto see signs of an early altcoin season, Ethereum’s MVRV ratio growing faster than Bitcoin’s, indicating a potential altcoin season led by Ethereum counts given the current situation of ETFs.