The cryptocurrency market is known for its volatility, and one aspect that often garners significant attention is the altcoin season. According to a recent post by pseudonymous crypto trader Daan Crypto Trades, the euphoric altcoin season may not begin just yet.
The Total Market Cap Must Increase Significantly
Daan Crypto Trades believes that the total market capitalization (TOTAL3) of all cryptocurrencies excluding Bitcoin and Ether must increase around 16% from its current level before the euphoric altcoin season begins. At the time of writing, TOTAL3 is valued at $962.78 billion, according to TradingView data.
The trader noted that the market cap has already increased by approximately 91.45% since January 1st, but it still needs to reach its 2021 all-time high of $1.13 trillion and enter price discovery for the euphoria phase to start.
Why Volatility Will Continue
Daan Crypto Trades stated that he would be more cautious if TOTAL3 fell below $800 billion. He believes that as long as the market cap trades between ~$840B and ~$1.1T, it will remain choppy.
The current situation is far from being a cause for celebration, but it’s not time to sound the alarm either. The total market cap has still managed to increase by 91.45% since January 1st. However, this growth might be attributed to the ongoing hype and speculation in the market rather than any significant fundamental improvements.
A Shift Towards Altcoins?
The current volatility and fluctuations in the cryptocurrency market have led some analysts to believe that traders are adopting a more short-term outlook. This change in behavior has resulted in increased volatility, making it difficult for crypto tokens to see breakouts as quickly as they did in previous cycles.
According to CoinMarketCap data, the top three gainers among the top 100 cryptocurrencies over the past seven days are Bitget Token (BGB) with an 80.65% rise, Virtuals Protocol (VIRTUAL) with a 42.30% rise, and Pudgy Penguins (PENGU) with a 31.63% rise.
Is It Time to Rotate to Altcoins?
With Bitcoin dominance back up to almost 60%, traders are starting to believe that it may be time to switch their accumulation strategy towards altcoins. The growing sentiment is that altcoins offer a more optimal Risk-Reward (R/R) profile than Bitcoin does.
Pseudonymous crypto trader Dyme stated in a recent post, "Altcoins, at this juncture, offer a far more optimal R/R profile than Bitcoin does." They also added, "Time to DCA [Dollar-Cost Averaging] Bitcoin is over for another 1.5+ years."
Why Altcoins Are Becoming More Attractive
The growing attractiveness of altcoins can be attributed to several factors, including their relatively lower prices and potential for growth. As the market becomes increasingly volatile, traders are starting to look towards altcoins as a more viable option.
The overall sentiment in the market is shifting, with many analysts and traders believing that it’s time to switch their accumulation strategy towards altcoins. However, this shift should not be taken lightly, and traders must carefully assess the risks and rewards associated with investing in altcoins.
Conclusion
The cryptocurrency market is known for its unpredictability, and the current situation is no exception. The total market cap must increase significantly before the euphoric altcoin season begins, and volatility will continue until then.
However, as the market becomes increasingly volatile, traders are starting to believe that it’s time to switch their accumulation strategy towards altcoins. With a more optimal Risk-Reward profile and relatively lower prices, altcoins are becoming an attractive option for traders looking to diversify their portfolios.
The question remains: will the euphoric altcoin season happen soon? Only time will tell, but one thing is certain – the cryptocurrency market will continue to be volatile until then.
