Excitement about a potential altcoin season has faded, with altcoins seeing corrections in the 10-20% range. The decline in altcoin FOMO suggests a bottom may be forming.
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On-chain data provider Santiment shows that a decline in FOMO and a surge in crowd fear suggest a market bottom.
Sentiment on large altcoins such as Shiba Inucoin (SHIB), Dogecoin (DOGE), XRP, etc. has dropped significantly.
With FOMO levels reaching 2024 lows, this shift could provide a buying opportunity for patient traders.
After a potential big rally season and expectations in the altcoin market, FOMO has finally cooled down. In the past week, we have seen altcoins pullback between 10-20%, with the exception of a few altcoins like Ethereum.
Altseason FOMO cools, suggesting market bottoming
On-chain data provider Santiment has spotted a notable trend in the altcoin market. According to its analysis, rising altcoin season mentions tend to coincide with market peaks. This suggests traders have become too greedy due to their surge in interest in altcoins, thereby signaling a potential market top.
However, after the market peaked in March, the fear of missing out (FOMO) has dropped significantly. According to Santiment, the current climate of collective fear may bring us closer to the market bottom, providing great opportunities for investors.
Additionally, market sentiment for large altcoins including Shiba Inu (SHIB), Dogecoin (DOGE), and XRP has declined significantly following recent price drops, according to Santiment data. Santiment noted that this shift in sentiment could provide a buying opportunity for patient traders.
With FOMO levels reaching 2024 lows, investors who have been waiting for the market to cool down may consider pouring new money into the market.
Completion of the expected upcoming altcoin bull run While Bitcoin price hovers near its all-time high, most altcoins are still trading below their highs. Benjamin Cowen, a well-known cryptocurrency analyst, said that enthusiasm for the upcoming altcoin bull run may be premature.
He further added that unless the Fed starts cutting rates again, a major rally is unlikely. Historically, altcoins have always delivered strong returns following a Fed rate cut.
Cowen said:
“The decline in most altcoins is reflected in the decline in the Advance/Decline Index, which echoes the period before the Fed’s 2019 rate cuts. The index fell sharply before the Fed began cutting rates in July of that year. Tracking these movements is critical because if the Fed does not lower rates, it may be premature to expect an altcoin season to dominate Bitcoin.”
