Altcoin markets have seen significant gains since Donald Trump’s US presidential election victory, but a venture capitalist has warned that short-term changes are likely as institutional investors increase profit-taking activity.
But not all traders agree.
“We are currently considering the replacement season closed,” Felix Hartmann, managing partner at Hartmann Capital, said in a December 7 X post.
VCs ‘will start clipping more aggressively’
“Traders can remain irrational, but we’re at a point where teams and VCs are starting to clip more aggressively,” Hartman said.
“When momentum is waning, you might have to pull out the lever and look at the murderer,” Hartmann said. He said funding rates for most altcoins are currently “north” of 100% per annum and described a “pure movement” driven by perpetual traders amid recent declines in spot trading volumes.
“Putting the legs down would be unsightly,” Hartmann said.
source: Felix Hartman
Among the top 100 cryptocurrencies, the three altcoins with the highest gains since November 1 are Hedera (HBAR), up 99.31%, IOTA (IOTA), up 79.61%, and JasmyCoin (JASMY), up 72.47%, according to CoinMarketCap data. .
After a huge surge in the altcoin market in 2021, several altcoins have plummeted in the months since.
In November 2021, Solana (SOL) reached $248.36 before plummeting 64% to $89 by January 2022. XRP (XRP) also saw a steep decline, falling approximately 51% during the same period.
Opinions from other traders
However, other cryptocurrency traders believe this is just the beginning of altcoin season.
“This month through March seems logical,” pseudonymous cryptocurrency trader MilkyBull Crypto said in an X post on December 6.
“It lasts about 90 days,” he added.
“Altseason has just begun,” Sensei told his 72,900 X followers.
relevant: Altcoin funding rate reached the highest level in 9 months. Are you optimistic about Alt Season or is it a red flag?
Traders often monitor Bitcoin’s dominance as a key indicator signaling the start of altcoin season. Bitcoin dominance at the time of publication was 55.11%, down 7.88% over the past 30 days, according to TradingView data.
On December 4, Cointelegraph reported that the 30-day funding rate for perpetual futures had risen significantly, according to data from CoinGlass. Bulls are paying between 4% and 6% per month to maintain their leveraged positions.
These costs may seem manageable during strong uptrends, but if prices are stagnant or falling, they can quickly erode a trader’s margins.
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