Altcoin season hasn’t arrived because everyone jumped ‘straight to the punchline’

As crypto traders eagerly await a potential altcoin season, one analyst argued it won’t unfold as most expect because new crypto traders rush to buy the most speculative assets too soon.

“The joke has been told, everybody knows the punchline, and they’ve just gone straight to the punchline, and it is just not funny anymore,” Glassnode lead analyst James Check said in an Aug. 29 episode of the Rough Consensus podcast.

Traders attempted to outsmart the market

Analyzing trader behavior during the 2021 bull run and comparing it to 2024, Check said traders have tried to outsmart the market by jumping straight to buying the most hyped memecoins as quickly as possible. 

In past bull runs, memecoins would typically surge toward the end of a broader market rally, but this time around the assets have been rallying faster than ever before. 

“In 2021, we had the everything bubble, where it was this beautiful capital waterfall, Bitcoin, Ethereum, L1s, DeFi, all the way down to monkey JPEGs,” Check explained. He noted that many crypto natives had now learnt the quickest way to make the most money was to “buy the most stupid coin.”

Check claimed that following the approval of spot Bitcoin (BTC) exchange-traded funds (ETF) on Jan. 10, traders began taking advantage of the sharp uptick in the price of Bitcoin to swing for the fences on memecoins.

Traders jumped straight to PEPE

Instead of buying app utility tokens or other assets higher up the risk curve, “they went straight to PEPE token.”

Notably, PEPE (PEPE) posted staggering gains throughout the first half of 2024, with a select few traders making eye-watering profits. On May 15, one savvy PEPE trader made $46 million in profit, a whopping 15,718-fold return on his initial $3,000 investment in April.

However, despite the price of PEPE and other major memecoins such as Dogwifhat (WIF) soaring, Check said “there was this gap in the middle where no one touched anything.”

Related: Key altcoin season metric in accumulation mode as Bitcoin dominance peaks

On the other hand, other traders and analysts interpret the dwindling prices of altcoins and lower-than-anticipated trading volumes as a bullish signal for future price action.

On Aug. 29, crypto trader Luke Martin told his 331,500 X followers that “altcoins currently at the ‘sell your house to buy more’ level.”

Martin said that when Bitcoin was at this level in the summer of 2020, the price surged sixfold in the second half of the year.

“Price went vertical from 10k to 60k over the next 6 months,” Martin said.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.