As crypto traders eagerly await a potential altcoin season, one analyst claims the season will not unfold as expected as new crypto traders rush to buy the most speculative assets too quickly.
“The joke got out, everyone knew the punchline, they jumped right into it, and it wasn’t funny anymore,” Glassnode senior analyst James Check said in the Aug. 29 episode. rough agreement Podcast.
Traders tried to corner the market.
Check analyzed trader behavior during the 2021 bull market and compared it to 2024, finding that traders tried to outsell the market by buying the most hyped memecoins as quickly as possible.
In past bull markets, Mimecoin has typically surged at the end of the overall market rally, but this time around, the asset is rising at a faster rate than ever before.
“In 2021, we had all these bubbles, it was a beautiful capital waterfall, Bitcoin, Ethereum, L1, DeFi, and even monkey JPEG,” Check explained. He noted that many crypto natives have now figured out that the fastest way to make the most money is to “buy the dumbest coins.”
Check claimed that since the approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) on January 10, investors have started to take advantage of the surge in Bitcoin prices to dampen the buying pressure on Mimecoin.
Traders jumped straight into PEPE
Instead of buying app utility tokens or other assets with a higher risk curve, “they went straight to PEPE tokens.”
Pepe (PEPE) has been on a tear throughout the first half of 2024, with some traders making eye-popping profits. On May 15, one smart PEPE trader made $46 million, a whopping 15,718x return on his initial $3,000 investment in April.
PEPE is up 757.37% over the last 12 months. Source: CoinMarketCap
But despite the price surges in other major MiCoins like PEPE and Dogwifhat (WIF), Check said there was “a gap in the middle where no one was touching anything.”
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On the other hand, other traders and analysts interpret the altcoin’s price decline and lower-than-expected volume as a bullish signal for future price action.
On August 29, cryptocurrency trader Luke Martin told his 331,500 X followers that “altcoins are currently in a ‘sell your house, buy more’ state.”
Martin said that when Bitcoin was at this level in the summer of 2020, the price surged sixfold in the second half of that year.
“The price went straight up from $10,000 to $60,000 over the next six months,” Martin said.
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This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.