Altcoins
Will there be an Altcoin season in 2024? Expert analysis
Sentiment around altcoins remains cautious. Although Bitcoin has approached all-time highs and the rebirth of meme coins, retailer interest in altcoins has been muted. Here is an analyst exploring possible gaps in the current altcoin cycle in 2024.
The famous analyst Miles Deutscher highlights major challenges in the altcoin market of 2024, in stark contrast to the bullish mood of 2021. Many altcoins are underperforming due to Bitcoin price fluctuations, with risks of further declines if key support levels fail.
The German government’s plan to sell 3 billion dollars Bitcoin caused panic in the market, although it did not affect Bitcoin’s daily trading volume much. Altcoins such as Injective, Stacks, Bunker, Arweave, and Celestia have fallen significantly, showing overall market weakness influenced by Bitcoin’s dominance.
Proliferation of cryptographic tokens
Since April 2024, more than 1 million new crypto tokens have been created, many of them memecoins on the Solana network. Deutscher says this is because it is easy to create new tokens, which leads to market saturation and dilution. He likens this wave 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 criticizes venture capitalists for contributing to market imbalances by timing their investments to maximize returns rather than supporting the sustainable growth of projects. He discusses how venture capital investments, coupled with delays in project launches during bearish market conditions, exacerbate token dilution and strain market liquidity. The trend towards private markets creates barriers for retail investors, impacting market sentiment and participation.
How to navigate the current market
Deutscher recommends focusing on high-quality projects with clear narratives, innovative tokenomics, and strong community support. Projects that differentiate themselves in areas 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, including buybacks and staking, are critical to sustaining long-term investor interest and mitigating market pressures.
On the other hand, analyst Miles Deutscher finds the Real World Assets (RWA) sector interesting, with plans to accumulate ETH and other altcoins. He recommends a medium to long-term perspective (6-12 months or more) to weather market volatility and use periods of low volatility to accumulate strong altcoins.
Is Altcoin Season Coming?
Despite the current challenges, some investors see bullish signs. Layah Heilpern points to factors like Bitcoin and Ethereum ETF Approvals and endorsements from high-profile figures, suggesting the market is ready for a big move. Whereas, 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.