Well this was unexpected. At least to most of the trading crowd who watched crypto market caps shrink substantially throughout the past 13 months.
The many altcoin bounces that we’ve seen to start 2023 have hardly been historic. But these are at least some of the larger price booms that we’ve seen ever since the crypto market bull runs came to a screeching halt in November, 2021.
Among the top 100 crypto market cap assets, some standout price returns over the past week include:
- Lido DAO (LDO): +60%
- Solana (SOL): +44%
- Aptos (APT): +39%
- Hex (HEX): +33%
- Decentraland (MANA): +28%
- The Sandbox (SAND): +26%
There were hundreds of projects that gained at least 10% of their price back over the past week. And surely, there is a still a long uphill climb for many of these crypto market caps to reach the levels they were at one year ago. But that said, why did 2023 kick off with such a bang for altcoins?
Crypto Market Sentiment
For one thing, there has been a whole lot of doubt that alts could recover after their tragic downfall throughout 2022. And these doubters could very well still be right. But when you see results like these in our polls, you can be pretty confident that FUD is ripe to be countertraded:
With just under two thirds of voters here expecting that altcoins would fall back, it goes with Santiment’s mantra that prices move in the directions of the crowd’s unlikeliest expectation. As of now, assets have continued to pump while Bitcoin has crept up enough to allow smaller projects to thrive.
Take a look at this chart that shows the frequency of mentions of words like altcoin or altseason vs. the price of Ethereum (as a diluted representation of the prices of many altcoins):
We haven’t had many opportunities to point it out over the past year. Still, when we see altcoins being mentioned as prices are rising, it usually means the crowd has recognized that altcoins are pumping and are trying to FOMO in. The result is usually that a top forms. At least until the crowd starts doubting that the crypto market can rise again.
Where Are We Now?
Well, it does look like altcoin excitement has heated up a lot due to price action. With the mainstream chiming in to proclaim it’s time to buy altcoins, this likely means the time has expired for now. Among those leading altcoins over the past week that we mentioned, be especially cautious in expecting their momentum to continue while the word is being spread far and wide that they’re pumping.
If you’re trying to time your trades between holding Bitcoin/stablecoins vs. altcoins, it is never a bad strategy to wait to take some profits in BTC until the mainstream’s altcoin FOMO dissipates.
Can altcoins continue to push higher a bit longer? Yes. Do they look as intriguing as they did on New Year’s Day? Not until Bitcoin itself sees a bit of momentum.
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