Crypto experts suggest that altcoins remain in an early “speculative” phase, yet to reach the highs of 2021.
Despite some altcoins seeing price surges, the overall market lacks strong participation from retail investors. The ongoing memecoin craze appears to be absorbing much of the attention, limiting the short-term upside for many altcoins.
For example, the number of daily active wallets on the Algorand network dropped to 182,170 as of Feb. 10, when ALGO was priced at around $0.28. This is a stark contrast to its all-time high period in December 2021, when over 1.31 million addresses were active, according to data from IntoTheBlock.
Similarly, Chainlink’s active addresses declined to 3,860 on Feb. 10, significantly lower than the 11,280 wallets recorded on May 3, 2021, when LINK peaked at $46.71.
According to Nicolai Sondergaard, a research analyst at Nansen, altcoin season hasn’t fully arrived because memecoins are currently dominating investor interest.
“Altcoin season will happen, but it may look different from past cycles. With so many tokens available now, capital is spread out more widely. While some altcoins will see strong gains, only certain sectors and projects will outperform,” Sondergaard told.
Despite their speculative nature and lack of real utility, memecoins continue to lead retail trading activity due to their potential for fast profits.
On Feb. 14, a crypto trader made $28 million in profit from buying “Broccoli” memecoins—reportedly inspired by Binance co-founder Changpeng Zhao’s dog. However, speculation remains that this wallet could belong to an insider.
Altcoins Still in Early Speculative Growth Stage
While some altcoins have posted gains, the lack of an increase in daily active addresses suggests the market is still in its initial speculative phase rather than a full-blown rally.
“Lower daily active addresses compared to 2021 highs indicate we’re still early in the cycle,” said Marcin Kazmierczak, COO and co-founder of Redstone. “If prices rise without a corresponding increase in active wallets, it suggests we are in the speculative phase before broader adoption.”
Meanwhile, the total market cap of altcoins—excluding the top 10 cryptocurrencies—has hovered near a three-month low of $277 billion, according to TradingView.
This figure is still down over 77% from its peak of $492 billion on Nov. 10, 2021.
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