- Altcoins like Hedera and IOTA posted significant gains, with Hedera up 99% since November 1.
- Some venture capitalists warn of an imminent market correction as institutional profit-taking rises.
- Other traders remain optimistic, predicting the current altcoin season could last until March.
The cryptocurrency market has seen a surge in altcoin prices following Donald Trump’s presidential election win. However, conflicting opinions have emerged regarding the sustainability of the rally.
Felix Hartmann, managing partner at Hartmann Capital, expressed caution, suggesting that a market shakeout may occur soon as venture capital firms and institutional investors begin profit-taking. Hartmann noted in a December 7 post on X that funding rates for altcoins have climbed over 100% annualized, and declining spot trading volumes indicate a growing reliance on leveraged traders. He warned that a significant market correction could bring sharp price declines.
Data from CoinMarketCap shows Hedera leading the altcoin pack with a 99% gain since November 1, followed by IOTA and JasmyCoin, which rose 79% and 72%, respectively. Despite these strong performances, Hartmann’s outlook echoes the sharp corrections witnessed by altcoins like Solana and XRP in late 2021.O
Optimistic Traders Eye Prolonged Altcoin Season
Not all market observers share Hartmann’s cautious stance. Some traders believe the current rally marks the beginning of a prolonged altcoin season. Pseudonymous trader MilkyBull Crypto suggested that this trend could extend into March, based on historical patterns. Another trader, known as Sensei, expressed confidence in the ongoing momentum, calling it the start of an altcoin surge.
Market watchers often use Bitcoin dominance as a metric to gauge the health of altcoin markets. According to TradingView data, Bitcoin dominance has declined 7.88% over the past month to 55.11%, signaling increased interest in alternative cryptocurrencies. However, rising costs to maintain leveraged positions, as reported by CoinGlass, pose risks for traders if the market stagnates or dips.
As altcoin markets continue to climb, the debate between cautious and optimistic outlooks highlights the uncertainty surrounding the cryptocurrency landscape.
