Altcoin Season 2024 Prediction: Memecoins’ Downturn May Indicate Significant Market Transformations

Bitcoin (BTC), the original and largest cryptocurrency, has been leading the recent surge in digital assets. However, there are whispers suggesting that smaller players, known as “altcoins,” are preparing for their moment in the spotlight. On March 12, Bitcoin’s price surged to $71,808.47, approaching the $72,000 mark, a 4.70% increase. The trading volume also saw a significant spike of 76.91% to $64.61 billion in the last 24 hours, while the total crypto market cap reached $1.41 trillion.
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Now, let’s take a closer look at which altcoins are gearing up for Altcoin Season.
The craze surrounding meme coins seems to be fading, but other altcoins such as Ethereum (ETH), XRP, Cardano (ADA), Avalanche (AVAX), Polkadot (DOT), and Chainlink (LINK) are gaining momentum. Investors are increasingly seeking speculative assets beyond Bitcoin, leading to a redistribution of wealth within the crypto market.
As Bitcoin’s price reaches its peak, its impact on meme coins appears to be diminishing. Dogecoin (DOGE) and Shiba Inu (SHIB) are experiencing modest gains, while other altcoins are showing significant strength. Ethereum has surpassed the important milestone of $4,000, with Ripple (XRP), Cardano (ADA), Avalanche (AVAX), Polkadot (DOT), and Chainlink (LINK) also rallying alongside.
Other altcoins like Litecoin (LTC), Stellar (XLM), and Near Protocol (NEAR) are also experiencing substantial gains, driven by anticipation ahead of the Nvidia 2024 GTC Conference. Market observers, such as @CryptoTony_, suggest that meme coins may enter a cooling-off period as investors shift their focus to promising altcoins.
So, where are these altcoins heading?
According to Matt Hougan, CIO of Bitwise, this trend is caused by a classic wealth effect. Crypto investors who are satisfied with their Bitcoin profits are now looking for better returns in other assets. This redistribution of wealth is making altcoins more popular, as investors move their profits from Bitcoin to these smaller cryptocurrencies. Historically, once Bitcoin breaks its all-time high (ATH), the real altcoin season begins within 2-3 weeks. The total altcoin market cap has just surpassed $1 trillion and is now heading towards its ATH at $1.7 trillion.
However, this altcoin season could be different from previous cycles due to the unique dynamics of the current bull market. Insights from Santiment suggest a noticeable shift, with Bitcoin hitting new highs and experiencing significant capital inflows through Spot Bitcoin ETFs. Meanwhile, altcoins are gaining attention as the total crypto market capitalization and trading volume increase.
There is a potential scenario where Bitcoin’s rally is driven by fresh capital from institutional investors following the approval of spot BTC ETFs in January. This influx of institutional investment could prolong the altcoin season and have unprecedented effects on market dynamics. In this scenario, if Bitcoin breaks its previous ATH and quickly doubles in value within a matter of weeks, it usually experiences a mega breakout without much of a pause. Surprisingly, during this period, altcoins may not receive much attention until Bitcoin takes a breather after its initial surge.
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