Stop worrying about when DOT and FIL will rebound! My intuition is getting stronger: this round of 'general rally in the frenzied altcoin season' is really coming! It's not just empty talk; the actions of external funds can no longer be hidden—many early movers and friends in traditional secondary markets have quietly entered, setting up altcoins at lower levels. Once ETH really takes off, the massive influx of traditional secondary market funds will make liquidity overflow a certainty, and at that time, altcoins will act like in 2021, where just grabbing any altcoin with an ecosystem could double your investment!
One, don't wait for 'calls' before taking action! Institutions and traditional players have quietly set up positions.
Recently, I had dinner with several friends who are involved in private equity and U.S. stock trading. They said something that shocked me: 'There are no opportunities in small U.S. stocks now, so we've moved 5%-10% of our positions into crypto altcoins, specifically targeting those that have dropped more than 80% and have real ecosystems.'
It's not that they're buying wildly; there's a clear logic behind it:
Institutions look at 'odds': many altcoins have dropped 90% from their 2021 highs and now have market caps of only a few million dollars, while a junk stock in the U.S. market has a market cap of hundreds of millions. As long as there is market activity in the crypto space, the rebound potential for these altcoins is more than ten times that of U.S. stocks.
Traditional players focus on 'liquidity signals': they have noticed that the on-chain transaction volume of ETH has been increasing and that the trading pairs on Uniswap have become much more active. This is a signal that 'funds are about to move'—before the 2021 altcoin season, there were also these small signals, and then when ETH rose, funds rushed into altcoins.
A friend who does quantitative trading told me, 'We are increasing our altcoin positions, especially those with a market cap of $100-500 million and increasing TVL (Total Value Locked) in DeFi altcoins, like Pendle and MORPHO mentioned earlier, and a few new Layer2 altcoins. We've already built 30% of our base, just waiting for the signal when ETH breaks $5000.'
These 'early movers' never wait for the market to shout 'altcoin season is here' before entering—they have already made a profit and are preparing to exit by the time everyone else sees the market conditions. The current situation is very reminiscent of October 2020: back then, institutions were the first to set up positions, and ETH rose from $400 to $1000 before altcoins started to surge, with SOL and AVAX later increasing more than tenfold.
Two, core logic: when ETH rises, traditional secondary funds will 'flood in'.
Why is ETH's rise the 'catalyst' for altcoin season? Because ETH is the 'liquidity hub' of the crypto space.
When ETH rises, retail investors will feel that 'the bull market is really here', and start shifting from BTC to ETH, then from ETH to altcoins.
Traditional secondary market funds prefer ETH: they believe ETH has an ecosystem and applications, unlike BTC which is merely 'digital gold'. As long as ETH can hold above $5000, proving that there is a profit-making effect in the crypto space, these funds will come in through ETFs, OTC deposits, and so on, first buying ETH, and then naturally spilling over into the altcoins in the ETH ecosystem (like Uniswap, Aave, and smaller altcoins on Layer2).
I checked the data: there is currently nearly $20 trillion of 'idle funds' in the traditional secondary market—these funds have no opportunity in the U.S. stock market and can't make money in the A-share market, and they are looking for places to 'hedge and appreciate'. During the bull market in 2021, about $300 billion from these funds came in, driving altcoins crazy; now the total market cap of crypto is only $4.02 trillion, higher than $3 trillion in 2021, but the proportion of altcoin market cap is only 12% (compared to a high of 35% in 2021), indicating a huge potential.
More importantly, the quality of altcoins is 'higher than before': many altcoins in 2021 were 'air coins', but now many have real businesses — like those doing AI data storage, cross-chain payments, and DeFi aggregation. These projects, if listed on the U.S. stock market, would be considered 'high-growth targets' that traditional investors would easily understand and be willing to invest in.
Three, don't rush blindly! These 3 types of altcoins are the 'main forces' in a general market rally.
Not all altcoins will rise; in 2021, many altcoins remained stagnant during the general market rally and ultimately went to zero. To benefit from this frenzied altcoin season, you need to focus on these 3 types:
Supporting altcoins in the ETH ecosystem.
For example, projects on Layer2 (small altcoins in the Arbitrum and Optimism ecosystems), and 'segment leaders' in the DeFi space (like Hyperliquid for perpetual contracts and Ethena for staking)—these projects are tied to ETH. When ETH rises, their users and trading volumes will also increase, and their prices will naturally rise. When ETH reached $4800 in 2021, altcoins on Arbitrum averaged a 5-fold increase; this is the logic behind it.
Old mainstream altcoins that have been beaten down.
Like previously mentioned DOT, FIL, as well as ADA and XRP—these have dropped for 3 years, and most of the trapped positions have been cut, yet they still have market caps and a certain level of consensus. Once liquidity comes in, these 'old altcoins' will be pulled up first by funds because they are large-cap, making them easier to buy and sell, and institutions are willing to purchase them. In 2021, XRP rose from $0.2 to $1.9, which was a rebound after being beaten down.
New frontier altcoins with 'real demand'.
For example, small altcoins in new frontiers like AI+Web3, NFT-Fi, and real storage—these sectors interest traditional funds. For instance, AI data storage needs altcoins from the FIL ecosystem, and NFT-Fi needs altcoins from the ETH ecosystem. As long as there are projects that can be implemented, funds will follow. Recently, an altcoin focused on AI data rights management rose from $0.01 to $0.05 simply because traditional VCs entered the market.
Four, what should we do now? 3 steps of preparation, wait for ETH to rise and then get on board.
First, create an 'observation list', don't search randomly at the last minute.
Now find 3-5 examples from the 3 types of altcoins above and note them down: for example, Hyperliquid from the ETH ecosystem, altcoins from the Layer2 Arbitrum ecosystem, old mainstream coins like DOT/FIL, and new frontier AI storage altcoins. Understand what each project does, their current prices, and historical highs. When the market conditions improve, just refer to the list without rushing to find coins.
First build a 'base position', don’t wait until prices go up to chase.
If you have $100,000, you can now take $10,000 to $20,000 and build a base at these altcoins' 'support levels'—for instance, DOT below $3, FIL below $4, and new altcoins above 20% of their historical lows. You don’t need a large base, just mainly to 'secure a position', waiting for ETH to rise and altcoins to start increasing before adding to your positions, so you won't miss out.
Keep an eye on ETH's 'key points': $5000 is a signal.
If ETH breaks $5000 and holds for more than 3 days, it will be the 'sound of charge' signaling the start of altcoin season—at that time, whether institutions or retail investors will start buying altcoins, and liquidity will flood in like a deluge. You can check ETH's trading every day; if ETH can break the previous high of $4888 and trading volume increases to over $10 billion, it won't be far from $5000.
Finally, let me say something from the bottom of my heart.
The 'frenzied altcoin season' in the crypto world comes only once every few years; missing it means losing out on years of opportunity. In 2021, I saw someone around me turn $100,000 into $1 million through altcoins, while others missed the boat and regretted not participating. Institutions have already set up positions, traditional funds are waiting for signals, ETH is gathering strength, and everything is heading towards 'altcoin season'.
Stop saying 'altcoins are all air'—those who called SOL air back in 2021 later watched it rise from $20 to $260; now those saying that new frontier altcoins are air might regret it next year. Of course, don't blindly buy air coins; focus on those with ecosystems, demand, and funding interest to actually profit during a general market rally.
I will continue to monitor ETH's trends and the funding movements in altcoins. If ETH breaks $5000, or if a certain type of altcoin starts to surge, I will immediately shout 'get on board' in the fan group. If you want to keep up with the altcoin season and make a big profit, just follow me—making money in the crypto world relies on timing and daring to position when others hesitate. Let’s not miss this opportunity!
