CryptoQuant CEO Analyzes Reasons Behind Altcoin Season’s Delay

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As a seasoned analyst with over two decades of experience in traditional finance and cryptocurrencies, I have witnessed countless market cycles and learned to appreciate their intricacies. The current state of the altcoin market is indeed fascinating, given the unique dynamics at play.

There’s a lot of chatter in the world of cryptocurrencies regarding the anticipated arrival of the ‘altcoin period’. Although Bitcoin has seen growth thanks to increased institutional interest and demand for spot ETFs, the altcoin sector is still quite quiet.

Experts and those in the know are closely examining the causes of this occurrence, uncovering a complex dance between financial transactions, investor actions, and significant market happenings.

Diverging Opinions on Delayed Altcoin Season

Ki Young Ju, the CEO of CryptoQuant, asserts that the current surge in Bitcoin (BTC) is distinct from past cycles. In a comprehensive post on platform X (previously known as Twitter), he expounded that the source of funds entering Bitcoin has changed. Now, institutional investors and spot ETFs are primarily responsible for Bitcoin’s expansion, rather than individual traders on cryptocurrency exchanges.

According to Ki Young Ju, these institutional investors and ETF buyers have no plans to shift their Bitcoin holdings into other cryptocurrencies, known as altcoins.

He emphasized that these players operate outside of crypto exchanges, making asset rotation less feasible. Moreover, smaller altcoins depend heavily on exchange users for liquidity, which has been lacking in this cycle.

The leader of CryptoQuant proposes that for altcoins to reach new peak values, fresh investment needs to be directed towards crypto trading platforms – this development, however, has yet to materialize. Although large-scale institutional investors might invest in prominent altcoins, lesser-known ones continue to depend on individual traders for their growth.

Ki Young Ju found that altcoins require unique approaches to draw new investments, rather than simply following Bitcoin’s trend. Although his perspective is somewhat cautious, he maintains a positive outlook.

Eventually, a period known as ‘altseason’ will occur, but not all altcoins will reach their old all-time highs (ATH). This was emphasized in his statement.

There are some who don’t concur with the CryptoQuant CEO’s viewpoint. Contrarily, a seasoned analyst and researcher at Glassnode, known as CryptoVizArt, posits that altseason has already started. He emphasizes Solana’s remarkable surge in daily active addresses, which currently stand at approximately 18.6 million—a figure close to 40 times greater than Ethereum‘s.

“Retail has already chosen where to gamble in this cycle,” CryptoVizArt noted.

As an analyst, I find myself observing a surge in interest surrounding meme coins and Solana-based projects. This trend, it seems, is indicative of an ongoing altseason according to some perspectives. Yet, Ki Young Ju’s analysis shares some similarities with this viewpoint but not entirely.

According to an observation made by a CryptoQuant executive, there’s an uptrend happening for several significant altcoins, while other altcoins are yet to see such a rise.

From my perspective as a researcher, I follow the historical approach taken by analysts such as Crypto Feras. They believe that altseasons typically unfold during the later phases of Bitcoin’s cycle.

According to Feras, altcoins experienced a significant decline as Bitcoin surged in the second half of 2020. However, they eventually rebounded.

It’s suggested that with so many alternative cryptocurrencies (altcoins) currently available, it spreads out investment funds, which means this altcoin season may have a smaller overall effect compared to earlier seasons due to the dilution of capital inflows.

The Psychology of Market Cycles

As a crypto investor, I found myself nodding along with XForceGlobal’s thoughtful rebuttal of Ki Young Ju’s perspective. He skillfully underscored the significant impact of psychological factors and the dominance metric on the intricate dance that is market behavior.

They stated that it’s difficult to determine whether institutions or individual traders are influencing the market more, since the market functions like a self-fulfilling prediction.

It’s often observed that the surge in altcoins (alternative cryptocurrencies) tends to follow Bitcoin’s price increase, as increased trust in Bitcoin frequently fuels growth in altcoins.

According to XForceGlobal, although altcoins may trail behind, it’s only a matter of time before the right financial movement lines up, which inevitably leads to an “altcoin season.

Contributing to the ongoing discourse, I’ve noticed that the Ethereum-to-Bitcoin (ETH/BTC) ratio reaching unprecedented lows could potentially signal a market transformation. Additionally, BeInCrypto has reported on altcoins primed for expansion, bolstered by improving sentiment and crucial technical signals.

As I analyze the current state of the altcoin market, it’s clear that the total market cap has yet to surpass its all-time high. This observation aligns with Ki Young Ju’s sentiment regarding insufficient influx of new liquidity from exchange users, a factor that could potentially impact future growth.

According to experts, there’s a general agreement that an ‘altcoin boom’ is likely, but its magnitude and extent are still unclear. The increased involvement of institutions in Bitcoin trading has significantly altered the market landscape, limiting the immediate impact on altcoins. Instead, the attention of small-time investors, crucial for altcoins, has been diverted towards specialized areas such as meme coins and Solana.

As a crypto investor, it’s clear to me that for altcoins to thrive and secure their own share of investment capital, they need to offer something fresh and compelling. This could be in the form of distinctive use cases, strategic partnerships, or groundbreaking technological advancements. Riding on Bitcoin’s coattails alone isn’t enough to carve out a lasting niche in this dynamic market.

In simpler terms, Ki Young Ju correctly pointed out that the expansion of Bitcoin relies more on Exchange-Traded Funds (ETFs), institutional investors, and government recognition, rather than individual traders. For altcoins to succeed, they need to adjust to this evolving landscape.

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2024-11-28 17:49