According to a cryptocurrency analyst, traders are purchasing memecoins too soon, which is why we haven’t witnessed this altcoin season.

An analyst stated that although cryptocurrency traders are excited about a possible altcoin season, it won’t happen exactly as planned since novice traders would rush to purchase the riskiest assets too soon.

In an Aug. 29 broadcast of the Rough Consensus podcast, Glassnode chief analyst James Check stated that the joke has been told, everyone knows the punchline, and they just jumped right to the punchline, making it no longer hilarious.

Traders made an effort to beat the market

Check claimed to have outsmarted the market by purchasing the most popular memecoins as soon as possible after examining trading activity from the 2021 bull run and contrasting it to 2024.

Memecoins have historically surged around the end of a larger market rise, but this time the assets have been rising more quickly than in previous bull runs.

The everything bubble of 2021 included the lovely capital waterfall, L1s, DeFi, Bitcoin, Ethereum, and monkey JPEGs, as Check elucidated. He observed that many people who were new to cryptocurrency had discovered that purchasing the most foolish coin was the fastest way to become wealthy.

Check stated that when spot Bitcoin BTC $59,215 ETFs (exchange-traded funds) were approved on January 10, traders started swinging for the fences with memecoins, leveraging the significant increase in Bitcoin’s price.

Traders went directly to PEPE

They immediately purchased PEPE token rather than application tokens for utilities or other assets farther up the risk curve.

During the initial part of 2024, Pepe $0.000008 saw astounding growth, with a small number of traders realizing returns that were beyond mouthwatering. One astute PEPE investor made $46 million on May 15, more than 15,718 times the initial $3,000 investment he made in April.

Nevertheless, Check claimed that there was a void in the center where nothing was touched, even while the value of PEPE and other significant memecoins like Dogwifhat (WIF) was skyrocketing.

However, some analysts and traders see the declining cryptocurrency prices along with lower-than-expected volume of trading as a bullish indication for future price movement. 

Cryptocurrency investor Luke Martin stated to his 331,500 Twitter followers on August 29 that altcoins [are] at the sell your home to acquire more level right now.

According to Martin, Bitcoin’s price increased sixfold in the 2nd part of 2020, when it was at this point in the summer.

Within the next six months, the price went from 10,000 to 60,000, according to Martin.

Important altcoin season metric is building as Bitcoin dominance reaches a climax

Following a three-month decline, altcoins are now in accumulation territory.

Crypto traders believe that the altcoin market is presently in the reaccumulation phase, which might lead to the 2nd leg of the cycle after regaining a significant support area.

In part of their July 25 piece on X, independent cryptocurrency analyst Mags stated that after 525 days of buildup, altcoins have only been up 58% since they broke out.

As the market has bottomed out and prices have reached local bottoms, the accumulation stage begins. This is demonstrated by the 33% decline in TOTAL2, the entire market capitalization of all digital currencies minus Bitcoin, since March 11. It is distinguished by a brief window of more stable prices during which investors buy on dips in expectation of higher prices in the future.

In spite of this pullback, cryptocurrencies have increased by 58% from break out of a protracted phase of accumulation, according to the chart that Mags posted, indicating that there may yet be further positive movement.

Most likely, this dip is just reaccumulation leading to a subsequent leg up.

The top 200 equal weight index, which gives cryptocurrencies equal weight regardless of market capitalization, dropped more than 55% over the last three months compared to the market cap index, which weights cryptocurrencies according to market capitalization. This information is based on data from the cryptocurrency tracking platform Bitformance.

The decline suggests that the altcoin season has not yet arrived because smaller cryptocurrencies have performed worse than Bitcoin.

Over the same three months, there was a 6% increase in the value of Bitcoin BTC $59,215, according to data from TradingView and Cointelegraph Markets Pro.

Although it’s not officially altcoin season, cryptocurrency YouTuber Crypto Rover noted that Bitcoin’s dominance is at its peak, providing altcoin investors with a chance to amass.

The dominance of Bitcoin and its market share in comparison to the other cryptocurrencies indicates that the market as a whole has moved money away from altcoins.

According to TradingView data, the dominance of bitcoin is very close to a multi-year high of 56.56%, up 3% over the last 90 days.

Altcoins get ready for the cycle’s second leg

Independent trader Jelle revealed a weekly timeframe chart of TOTAL3, which shows the total market capitalization of every digital currencies (excluding Bitcoin and Ether, ETH $2,524). Jelle noted that the price had effectively recovered a significant support region.

The $600 billion to $625 billion range, which TOTAL3 turned from resistance to support after Bitcoin rallied from multi-month lows below $54,000, was the range the analyst was alluding to.

Final preparations are being made. The cycle’s second leg is drawing near quickly.

Mustache, another trader, had similar thoughts after observing that the cryptocurrency market cap retested a crucial support point, just as it did in 2023, before starting a steady rally that culminated in a local high in March 2024.

It’s almost time for the cycle’s most thrilling part.