Altcoins
Altseason FOMO Drops Significantly, SHIB, DOGE, XRP Crowd Sentiment Tanks
After much trepidation around a possible alt season and expectations of a mega rally in the altcoin market, FOMO has finally cooled for the better. Over the past week, we have seen altcoins correct between 10-20%, except for a few like Ethereum.
Altseason FOMO Cools Down, Suggesting a Market Bottom
On-chain data provider Santiment identifies a notable trend in the altcoin market. According to his analysis, increasing mentions of altseason often coincide with periods of market highs and peaks. This suggests that traders have become too greedy and their interest in the altcoin has increased, indicating a potential market top.
However, after the market peaked in March, the fear of missing out (FOMO) decreased significantly. According to Santiment data, the current atmosphere of fear of crowds could potentially bring us closer to the bottom of the market, providing a huge opportunity for investors.
Courtesy: Feeling
Additionally, according to Santiment data, there is a significant decline in crowd sentiment for large-cap altcoins, including Shiba Inu (SHIB), Dogecoin (DOGE), and XRP, following recent price declines. Santiment notes that this change in sentiment could present a buying opportunity for patient traders.
As FOMO levels reach 2024 lows, investors waiting on the sidelines for the market to calm down might consider deploying new liquidity into the market.
Done, expect an impending Altcoin bull run
Although Bitcoin price is flirting with its all-time highs, most altcoins have continued to trade below their highs. Renowned crypto analyst Benjamin Cowen said enthusiasm for an imminent altcoin bull run could be premature.
He further added that a significant recovery was unlikely until the US Federal Reserve began cutting interest rates. Historically, altcoins have always generated strong returns after Fed rate cuts. Cowen said:
“The decline in the majority of altcoins is reflected in the decline in the advance/decline index, echoing the period before the Fed rate cut in 2019. This index saw a sharp decline before the Fed did not initiate rate cuts in July of the same year. Tracking these moves is critical because anticipation of an altcoin season dominating Bitcoin could be premature without an interest rate cut from the Fed.