Altcoins: The Shocking Warning From Crypto Experts

Altseason here, altseason there: crypto investors dream of a new altcoin season. But what will it actually look like? Size, duration, intensity… Speculations are running high. However, behind this enthusiasm, expert voices are warning: contrary winds, amplified by profit-taking from institutional investors, could sweep the market. Is a decisive turning point looming for altcoin traders?

Altseason: between hopes and realities

Despite impressive gains for hot altcoins like Hedera (+99%), IOTA (+79%) or JasmyCoin (+72%), some observers are sounding the alarm. Felix Hartmann, a partner at Hartmann Capital, believes that “teams and venture capital investors are beginning to cut back more aggressively“.

Considering alt season tapped out for now.

Most alts now have funding rates north of 100% annualized. Last moves purely perp driven, spot volumes declining.

Leg down will be ugly.

Doing some light 2x long BTC, 1x short tapped out dino coins

Traders may stay irrational,… https://t.co/s066BWjtsr pic.twitter.com/BEEzhpLnBe

— Felix Hartmann (@FelixOHartmann) December 7, 2024

According to him, “killer wicks” could appear on the charts if the momentum weakens, a striking image that illustrates the instability of this market.

The data does not lie: altcoin funding rates exceed 100% annualized, a clear sign of a market primarily driven by margin traders, while spot volumes decline. A precedent from 2021 shows how Solana dropped by 64% and XRP by 51% in a few months after a meteoric rise.

Some notable facts about altcoins recently:

• Hedera: +99.31% since November 1st;
• IOTA: +79.61% over the same period;
• JasmyCoin: +72.47% according to CoinMarketCap.

The parallels with 2021 are concerning, but optimists like MilkyBull Crypto believe that the altseason could last 90 days. It’s up to everyone to take their bet, but beware of the cold shower.

Crypto investors facing a tense season

For many crypto traders, the dominance of bitcoin is the key indicator. Currently at 55%, it has fallen by nearly 8% in a month. This raises hopes for a redistribution towards altcoins. But beware: high funding rates, between 4% and 6% per month for perpetual contracts, can quickly weigh on margins if prices stagnate or fall.

Some, like crypto trader Sensei Sensei, see this decrease as an opportunity: “The altseason is just beginning“, he claims to his 72,900 followers.

However, this view contradicts that of institutional investors, who prefer to secure their gains. The gap between optimism and caution underscores the chronic volatility of the crypto market.

In short, the altseason will largely depend on a wavering bitcoin. But if predictions of a revived BTC under Trump come true, will altcoins rise to the challenge? A battle of the giants is looming.