As a seasoned crypto investor with a decade of experience under my belt, I’ve seen enough market volatility to fill a few cryptocurrencies myself. The current altcoin market surge post-Trump’s presidency has been quite intriguing, but it’s not the first time we’ve seen such a trend. However, Felix Hartmann’s warning of an impending shakeout due to increased institutional profit-taking can’t be ignored.
Since Donald Trump became the U.S. President, the market for alternative cryptocurrencies (altcoins) has experienced significant growth. However, a financier has cautioned about a possible short-term correction due to increased selling by institutional investors looking to cash in on their profits.
However, not all traders agree.
According to Felix Hartmann, managing partner at Hartmann Capital, it appears that the ‘alt season’ (a period of increased interest and investment in alternative cryptocurrencies) may have run its course for the time being, as he expressed in a post on December 7.
VCs will ‘start clipping more aggressively’
Hartman noted that while traders might continue acting irrationally, it’s becoming a time when investment teams and venture capitalists begin to tighten their belts more significantly.
Hartmann stated that when the momentum shifts, we’ll need to act swiftly and adjust a specific mechanism (lever), as we might witness a surge in trading activity (murder wicks). He clarified that currently, the funding rates for most altcoins are above 100% on an annual basis, with recent price movements being mainly due to perpetual traders, while the spot market volumes are dwindling.
“Leg down will be ugly,” Hartmann said.
In the list of the top 100 cryptocurrencies, Hedera (HBAR), IOTA (IOTA), and JasmyCoin (JASMY) have shown the most significant growth since November 1st. Specifically, Hedera experienced a 99.31% increase, IOTA had a 79.61% surge, and JasmyCoin saw a 72.47% rise, as reported by CoinMarketCap.
In 2021, following a notable rise in the altcoin market, many altcoins experienced a steep decline over just a few months.
Back in November 2021, the price of Solana (SOL) peaked at $248.36, but then it plummeted by 64%, dropping to $89 by January 2022. Similarly, XRP (XRP) experienced a significant decrease, losing around 51% in the same timeframe.
Contrasting opinions from other traders
However, other crypto traders believe it is just the beginning for altcoin season.
In a December 6 post, the pseudonymous crypto trader known as MilkyBull Crypto stated that “it makes sense from this month (December) until March.
“Lasts about 90 days,” he added.
“Altseason has just started,” Sensei told his 72,900 X followers.
As a crypto investor, I frequently keep an eye on Bitcoin‘s dominance as it serves as a significant marker for when altcoin season might be upon us. Currently, Bitcoin’s dominance stands at 55.11%, representing a decrease of 7.88% over the past month, based on data from TradingView.
On December 4th, as per CryptoMoon’s report, the monthly fee for maintaining leveraged positions in perpetual futures has seen a substantial increase. This fee, paid by bulls, ranges from 4% to 6%. The data used for this observation comes from CoinGlass.
During periods of significant growth, these expenses might appear reasonable. However, should the market prices remain stable or drop, these costs could swiftly eat away at a trader’s profit margin.
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2024-12-08 05:59