As a seasoned researcher with over a decade of experience in the crypto market, I have witnessed numerous ups and downs, bull runs, and bear markets. The recent predictions by pseudonymous traders like Daan Crypto Trades and Dyme about the upcoming altcoin euphoria phase piqued my curiosity.
From my perspective, it seems that the current state of the altcoin market is indeed showing signs of a potential breakout, but we are not quite there yet. The total market capitalization (TOTAL3) needs to surpass its 2021 all-time high of $1.13 trillion before the euphoria phase begins.
In my experience, this stage is often characterized by a frenzy of buying and selling activity, driven by speculation and FOMO (Fear Of Missing Out). However, until we reach that threshold, I believe the market will continue to be choppy, as predicted by Daan Crypto Trades.
I also agree with Daniel Cheung’s assessment that traders have adopted a more short-term outlook this cycle, which may contribute to increased volatility. This is not uncommon in the crypto space, where emotions often drive decision-making.
On the other hand, it is interesting to see traders starting to rotate their focus towards altcoins as Bitcoin dominance increases. From my observations, altcoins can indeed offer a more optimal risk-reward profile at certain stages of the market cycle, as Dyme pointed out. However, I would advise caution when it comes to making investment decisions based on short-term price movements or FOMO.
Lastly, I’d like to add a bit of humor to this analysis: It seems that traders are becoming more like George Soros overnight, constantly monitoring charts and playing with leverage. As a researcher, I can’t help but wonder if they’ve also mastered the art of time travel yet, as that would certainly come in handy for making accurate predictions!
According to a cryptocurrency trader, the overall market value of altcoins needs to rise by approximately 16% from its current state for an altcoin frenzy (or “euphoric altcoin season”) to start; until that happens, we can expect continued volatility.
A crypto trader known as Daan Crypto Trades, speaking in a recent post on Dec 28th, predicted that the exuberant or frenzied stage will begin when the market capitalization of all cryptocurrencies except Bitcoin (BTC) and Ether (ETH), referred to as TOTAL3, exceeds its 2021 record high of $1.13 trillion and enters a phase of price exploration.
The euphoria phase will not begin until TOTAL3 breaches 2021 ATH
As of its latest publication, the total amount for TOTAL3 stands at a staggering $962.78 billion, as per data from TradingView. Since the beginning of this year, it’s seen an impressive growth of around 91.45%.
“As long as this trades between ~$840B and ~$1.1T, I think it will be choppy,” Daan said.
He said that he would be a “bit more cautious” if the TOTAL3 was to trade below $800 billion.
In recent times, some experts suggest that the general cryptocurrency market is experiencing increased volatility because traders are now focusing more on short-term strategies rather than long-term perspectives as they did in past years.
In a December 28th post, Syncracy Capital co-founder Daniel Cheung stated, “During this trading cycle, it seemed like everyone thought they were George Soros and obsessively watched hourly charts to perfectly time their trades and manipulate leverage.
According to Cheung, the primary explanation behind the slow crypto token breakouts compared to previous cycles is as follows.
Traders starting to rotate to altcoins
Based on CoinMarketCap’s latest figures, the three cryptocurrencies experiencing the greatest growth among the top 100 over the past week are Bitget Token (BGB), which has increased by approximately 80.65%, followed by Virtuals Protocol (VIRTUAL) with a rise of around 42.30%, and Pudgy Penguins (PENGU) seeing a gain of about 31.63%.
Currently, as Bitcoin’s dominance nears 60%, and its price has plateaued at the end of 2024, traders are increasingly thinking it might be a good idea to adjust their investment approach from Bitcoin accumulation to focusing on other cryptocurrencies, or altcoins.
In simpler terms, the anonymous cryptocurrency trader known as Dyme recently stated on Reddit that at present, altcoins provide a more advantageous Risk-Reward balance compared to Bitcoin.
“Time to DCA Bitcoin is over for another 1.5+ years,” Dyme said.
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2024-12-29 08:37