[TL;DR]:

BTC approaches $100,000, Cryptocurrency fear and greed index rises to a high of 94, but the AltCoin market is not uniform, failing to rise across the board, and some old-school AltCoins have even fallen silent.

In the past bull run market, altcoin zone rise rotation phenomenon is significant. With the rise of mainstream currencies such as Bitcoin and Ethereum, each altcoin track will experience explosive rise at different stages. However, the issue of insufficient Liquidity and lack of new funds in the current AltCoin market is becoming increasingly prominent.

In the future, as Liquidity is gradually released and investors' follow towards emerging tracks increases, the overall rise season of AltCoin may come again.

Introduction

With BTC reaching a historic high of 99,550 US dollars last week and approaching the $100,000 mark, market enthusiasm has once again surged, with many institutions generally optimistic about its future performance. However, in this context, whether AltCoins can still usher in the former "alt season" has become a hot topic of discussion. After all, in this Bull Market, there have been few instances of a comprehensive rise, and even some long-established AltCoins have fallen to the edge of assets and fallen silent. This article will delve into why the "alt season" is becoming increasingly difficult and look ahead to potential opportunities in the future.

BTC approaches $100,000, chain games etc. relay Meme to make up for the rise

Recently, driven by the Favourable Information of Trump's upcoming policy and other factors, investors' confidence has significantly increased, and the Crypto Assets market has ushered in a new round of growth.

As of the writing date, the price of BTC continues to rise, reaching a high of $99,550, just a step away from the $100,000 mark. At the same time, investor sentiment is extremely greedy, and the Cryptocurrency Fear and Greed Index has risen to a new high of 94 in three years.

Historical data shows that BTC has shown strong explosive power in similar situations, such as the price surge after Thanksgiving in 2017.

Even several analysts predict that, during the weekends when institutional investors are off the market, the 'panic buying' sentiment of retail investors may further boost the BTC price, making it likely to break through $100,000 or even higher. They point out that, against the background of global wealth rise, the BTC network effect value will continue to increase, with huge pump potential.

Meanwhile, the AltCoin market has experienced a pulsating rise trend, but the momentum of the previous Bull Market's overall rise has not been able to be replicated.

According to the author's observation, the most popular MEME zone has temporarily cooled down recently, while Metaverse, gaming, and AI zone Tokens have taken turns to rise, highlighting the structural bull market situation of speculation rotation in the market under the condition that Liquidity has not fully loosened.

The catch-up rhythm of the altcoin zone during the past bull market

In fact, during the past Bull Market, the phenomenon of altcoin zone's rebound rotation was particularly prominent, bringing rich opportunities to investors.

Taking the period from the end of 2020 to the first half of 2021 as an example, Bitcoin (BTC) pumped first, reaching a new all-time high, while Ethereum followed the pace in the middle and later stages, starting a stronger uptrend.

During this period, various altcoin tracks have also been launched, such as platform coins like GT, BNB, and the meme tracks of DOGE and SHIB, all of which have experienced explosive rises in specific stages. Public chain tracks such as SOL, AVAX, FTM, etc. have also emerged in the second wave of the market, and gaming, metaverse tracks, and some Decentralized Finance projects have also followed suit, all opening up their main waves of upward trends.

In the second half of 2021, as BTC and ETH rallied for the second time, the altcoin zone staged another general uptrend. Projects like SHIB in the MEME track continued to exert efforts, the public chain track also maintained strong momentum, while the gaming, Metaverse, and Non-fungible Token tracks similarly showed no weakness, and all refreshed their heights.

It is worth noting that the track of Decentralized Finance, which serves as the catalyst for the bull market, has stalled at this stage. FIL and XCH, which are stored in Decentralization, as well as EOS, ETC, BSV, etc., have also failed to continue the momentum of the first half of the year.

Entering the Bull Market cycle from the fourth quarter of 2023 to the first quarter of 2024, the altcoinzone still exhibits obvious catch-up rotation. With the simultaneous rise of BTC and ETH, new hot tracks such as AI, the L2 layer of Ethereum, and modular blockchain are emerging one after another, gaining popularity and rising. During this stage, new narratives are emerging in the public chain, RWA, inscription mainly led by Ordi, and Meme track mainly led by Decentralizationlaunch coin with BOME. However, the performance of tracks such as Decentralized Finance, Metaverse, games, and DAO is not outstanding.

It is not difficult to see from the above that there is a certain regularity in the phenomenon of the altcoin zone catching up during the past Bull Market. Under the leadership of mainstream currencies such as BTC and Ethereum, altcoins will experience explosive rises in different stages according to their own development and market popularity. However, since 2023, the altcoin zone has indeed not reappeared the situation of comprehensive rise.

Alt Season will it come again?

Despite the ever-changing history, the arrival of the altcoin season is closely related to Liquidity distribution. In the previous two Bull Markets, Ethereum played a central role, and the boom of ICO and Decentralized Finance drove the prosperity of the altcoin market in both rounds. However, in this round of Bull Market, despite BTC approaching the $100,000 mark, Ethereum and most altcoins seem to lack momentum.

We believe that this may be attributed to the highly concentrated funds in BTC under the driving force of Spot ETF, leading to a significant reduction in the share of funds flowing into AltCoins. The launch of financial products such as Spot ETF and Options this year further consolidates BTC's position as a global capital safe haven, thereby weakening the attractiveness of various AltCoins.

In addition, as various zones mature, Crypto Assets will inevitably undergo differentiation, just like the stock market. This is also a sign of the market's gradual maturity. We see that some high-quality assets, such as SOL, SUI, DOGE, etc., are attracting more funds to follow. However, for most other alts, the lack of a new narrative, insufficient liquidity, and the increasingly prominent problem of a lack of new capital are making it difficult to turn the tables relying solely on old players.

In addition, the industry's characteristic of 'speculating on new without speculating on old' also leads to a fragmentation of Liquidity between new and old coins.

Looking ahead, we note that the macro background is also creating conditions for the arrival of the altcoin season, and the altcoin index in Figure 4 is at 53, indicating that the market may be brewing larger fluctuations. After experiencing the interest rate hike cycle in 2022, the suspension of interest rate hikes in September 2023, coupled with the speculation and trading of BTC Spot ETF, although market liquidity is limited, it is gradually shifting towards easing.

As a result, with the start of this year's interest rate reduction cycle and Trump's friendly attitude towards encryption, market Liquidity is expected to be further released.

In summary, as the gradual release of Liquidity and the increasing follow of investors in emerging tracks, the general rise season of AltCoin's entire track may come again. For aggressive investors, actively laying out quality altcoin projects may bring more lucrative returns in the Bull Market, but it is also necessary to pay attention to discerning analysis and maintain a cautious operational philosophy.

Author: Charle Y., Gate.io Researcher

This article only represents the author's point of view and does not constitute any trading advice.

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