Following Bitcoin's (BTC) rapid rise to the $94,000-$96,000 range recently, investor interest has begun to shift back to the altcoin market.
According to a new report published by the cryptocurrency analysis platform Santiment, the surprising rise of Bitcoin's price to the $94,000-$96,000 range in the last five days has led investors to reinvest their gains into altcoin projects. While the entire cryptocurrency market rose by 10.2% last week, Bitcoin's increase remained at 7.6%. This indicates that there has been a significant inflow of money into smaller market cap altcoins, and investors want to capitalize on the potential rise in altcoins.
Santiment also points out that there has been a significant increase in shares about meme coin projects on social media platforms. The report interprets this situation as follows:
"When prices start to rise, investor interest typically shifts towards speculative assets that offer higher risk and return. After the losses experienced during the bear market from mid-January to early April, investors usually abandon altcoins and switch to Bitcoin or stablecoins. However, with the market's revival in the second half of April, it became inevitable for investors to return to a gambling mentality."
Has the altcoin season really arrived?
According to the Santiment report, expressions like 'altcoin season' (altseason) and 'altcoins' quickly became popular on social media. The report emphasizes that such enthusiastic approaches by investors are generally a sign that requires attention:
"Historically, the most suitable time to enter the altcoin season is observed to be when investors show no interest in altcoins at all. Because the market typically moves in the opposite direction of retail investors' expectations. The increasing belief among investors that 'altseason' has started can actually be considered a red flag."
The report also mentioned that the move of TRUMP coin, named after U.S. President Donald Trump, played a role in investors turning to altcoins. Following Trump's special invitation announcement for the campaign, the price of TRUMP coin increased by 54% within an hour, significantly contributing to the resurgence of meme coin culture.
Santiment emphasizes that as May begins, investors should carefully monitor the rapid changes in market sentiment, issuing the following warning:
"Remember that the transition from rational investments to speculative frenzy can be swift and punishing. Opportunities may be attractive for early movers, but investors need to be cautious and not get swept up in the excitement of the crowd."
Stay tuned for new developments
