Altcoins
Will There Be An Altcoin Season In 2024? Expert Analysis
Altcoin performance in 2024 has been a real enigma for investors and enthusiasts. Despite Bitcoin approaching all-time highs and the rebirth of meme coins, retailer interest in altcoins has been muted. Analyst Miles Deutscher sheds light on the potential reasons behind this disconnect, offering valuable insights for navigating the current altcoin cycle. Is there still room for growth in this market?
Let’s delve into Deutscher’s analysis to find out.
The Altcoin Market: A Sharp Contrast to 2021
Renowned analyst Miles Deutscher highlights significant challenges in the altcoin market in 2024, in stark contrast to the bullish sentiment of 2021. Many altcoins are underperforming as the price of Bitcoin fluctuates, with risks of further declines if key support levels fail.
The German government’s plan to sell $3 billion in Bitcoin caused panic in the market, although it did not have a major impact on Bitcoin’s daily trading volume. Altcoins such as Injective, Stacks, Bunker, Arweave, and Celestia fell significantly, reflecting the market weakness under Bitcoin’s dominance.
Flood of new tokens
Since April 2024, over 1 million new crypto tokens have been created, many of which are meme coins on the Solana network. Deutscher points out that the ease of creating new tokens has led to market saturation and dilution. He likens this influx of tokens to inflation, noting that each new token adds pressure to the market, reducing the value of existing tokens.
Deutscher criticizes venture capitalists for contributing to market imbalances by timing their investments to maximize returns rather than supporting sustainable project growth. He explains how venture capital investments, combined with delays in project launches during bear market conditions, contribute to token dilution and strain market liquidity.
This bias towards private markets creates barriers for retail investors, impacting market sentiment and participation.
How to Survive a Volatile Market
Deutscher recommends focusing on high-quality projects with clear narratives, innovative tokenomics, and strong community support. Projects that stand out in sectors such as Real World Assets (RWA), AI and gaming will likely fare better in an environment of market volatility.
Building strong communities and implementing effective tokenomic strategies, such as buybacks and staking, are crucial to sustaining long-term investor interest and mitigating market pressures.
On the bright side, Deutscher finds the Real World Assets (RWA) sector interesting and plans to accumulate ETH and other altcoins. He recommends taking a medium-long term view (6-12 months or more) to withstand market volatility and using periods of low volatility to accumulate strong altcoins.
Bullish Signals to Watch Out For
Despite the current challenges, some investors are seeing bullish signs. Layah Heilpern highlights factors such as Bitcoin and Ethereum ETF Approvals and endorsements from high-profile figures, suggesting the market is ripe for a significant move. Meanwhile, CryptoQuant CEO Ki Young Ju and technical analyst Mister Crypto see signs of an early altcoin season, with Ethereum’s MVRV ratio increasing faster than Bitcoin’s, indicating a potential Ethereum-led altcoin season given the l The current situation of the ETF.
Italian: https://www.youtube.com/watch?v=wgeFtI4xjXM
Do you agree with Deutscher’s assessment of the altcoin market?