As meme coins like Dogecoin DOGE/USD and Shiba Inu SHIB/USD rally, analysts are predicting a potential “altcoin season,” hinting at a shift in cryptocurrency market dynamics.
What Happened: While Bitcoin has been outperforming smaller tokens, analysts think that the recent market movements suggest this trend could soon change, reported CoinDesk.
Analysts from K33 Research noted that historically, altcoins started outperforming around this time. The “tremendous” rally in meme coins like Dogecoin and Shiba Inu could be a “possible early sign” of an altcoin season ahead, they added.
“Judging by history, altcoins will start outperforming about the time we are now,” K33 wrote.
They highlighted that Bitcoin’s market cap has doubled relative to the total value of all cryptocurrencies excluding Bitcoin and Ethereum ETH/USD since the November 2022 market bottom. This setup mirrors the late 2020 scenario when altcoins began catching up to Bitcoin’s run.
The recent surge in meme coins, including Dogecoin and Shiba Inu, which saw 40%-50% gains this week, and newer entrants like Pepe PEPE/USD, Bonk BONK/USD, and Dogwifhat WIF/USD, which doubled or more in price, could be an early indicator of the impending altcoin season, according to K33.
See Also: This Trader Turned $2,708 Into $3.25 Million With Trump-Related MAGA Memecoin
Cubic Analytics founder Caleb Franzen thinks that post the Bitcoin and Ethereum rallies, "shitcoins" will surge.
"I think that market psychology will repeat the same way that it always has. Bitcoin starts & remains strong. Then ETH participates meaningfully. Then shitcoins ride the wave."
However, K33 cautioned that timing the altcoin season is risky, as the landscape has changed with the introduction of Bitcoin ETFs. There’s no guarantee that the funds flowing into Bitcoin will eventually trickle down to smaller assets.
Swissblock analysts also suggested that an altcoin season could be imminent, with the key signal being ETH clearing the $3,500 price threshold.
Why It Matters: A $100 investment in Dogecoin at its lowest price point in May 2015 would be worth an astounding $1.5 million today, according to an analysis by Benzinga. This followed a 10% increase in Dogecoin’s price on the same day.
On the same day, a cryptocurrency analyst, Altcoin Sherpa, shared an optimistic outlook for Dogecoin and Shiba Inu, predicting a bullish run after extended periods of price consolidation. However, he warned that expecting all-time highs for these coins would be unrealistic at this stage due to their established market caps.
Dogecoin-related coins had made it to the list of top gainers among the top 100 cryptocurrencies by market capitalization, with the total market capitalization of the top 100 meme cryptocurrencies recording a jump of 12.8% in the last 24 hours.
Read Next: ‘Dogecoin Killer’ Shiba Inu Explodes For 60% Weekly Gain: This Indicator Shows Golden Cross
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Photo by Kanchanara on Unsplash
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
