Crypto analyst Miles Deutscher has highlighted the reasons behind the delay of the anticipated altcoin season.
He noted that speculative capital is shifting from major altcoins to low-cap meme coins, mainly due to platforms like Pump Fun that facilitate the creation of such meme coins. This shift in focus is diverting investment away from established altcoins.
The launch of Pump Fun is directly correlated to the destruction of the altcoin market vs $BTC. 👇
The reason we’ve seen no major “alt season” across majors, is because the speculative capital that would’ve once poured into top 200 assets, instead decided to jump the gun and… pic.twitter.com/g04L2SCar2
— Miles Deutscher (@milesdeutscher) February 4, 2025
Speculative capital usually flows into mid-to-high market cap altcoins during Bitcoin rallies, known as “alt season.” The CMC Altcoin Season Index indicates that the alt season occurs when 75% of the top 100 coins (excluding stablecoins and asset-backed tokens) outperform Bitcoin over 90 days. The index is at 37, suggesting that the alt season has not yet started.
Traders favour fast-moving, low-cap on-chain tokens over major altcoins, leading to a lack of significant “alt season” for top assets. This shift is partly due to platforms like Pump Fun, which enable quick launches and trading of meme coins, creating a high-risk environment. Early adopters may see substantial profits, while latecomers, primarily retail investors, often suffer heavy losses due to the volatility and illiquidity of these tokens.
Deutscher notes that this situation represents a more severe wealth destruction event than the early 2022 bear market, despite Bitcoin and some major altcoins remaining in a macro bull trend. He attributes the challenges to restrictive SEC regulations that hinder fair project launches, leading the industry to explore new models. He concludes with a hopeful speculation about potential changes under Trump.
In another development, Evgeny Shatov, a partner at Capital Lab, predicted that Bitcoin’s bullish run may soon end, leading to an altcoin season. He predicts Bitcoin could reach $115,000 to $135,000 before consolidating. At the same time, Bitcoin’s dominance index, currently at 56.7%, is expected to decline as altcoins increase in number and market cap, akin to trends observed in 2017 and 2021.
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