Forex Analysis & Reviews: 27.01.2025 - The Altcoin Season Ended...

27.01.2025 03:43 PM

The Altcoin Season Ended Before It Even Began

While everyone waits for the altcoin season—or rather its continuation—disappointing news has surfaced about a Solana ETF. Although few truly believed such approval would happen anytime soon, the fact remains that an attempt was made. January 25 was set as the deadline for the SEC's decision on a spot SOL-ETF. Speculation began circulating online that if a decision were to be made, it would happen by January 25, as the SEC typically avoids working on Saturdays. Unsurprisingly, nothing materialized. Recently, it was revealed that the applications were withdrawn, putting any hopes for SOL-ETF approval on hold for now.

The withdrawal of applications for a spot SOL-ETF left mixed feelings in the cryptocurrency market. Many investors anticipated that this could serve as a catalyst for boosting Solana's popularity and redirecting attention to other promising projects within its ecosystem. However, given the current circumstances, hopes for a quick approval of a spot ETF are fading.

Over the past year, the SEC faced repeated criticism for its slow pace and lack of transparency in regulating cryptocurrencies. Now, with new leadership, investors are questioning what strategy the SEC will adopt in 2025. Will the agency continue its cautious approach to such initiatives, or will it find a way to integrate cryptocurrency assets into the existing financial system?

Experts believe that the concept of a "traditional altcoin season" may no longer exist. Today, there are over 36.4 million altcoins, compared to fewer than 3,000 during the 2017–2018 season and fewer than 500 during the 2013–2014 season. With such an enormous supply, the market has fundamentally changed, and the focus has shifted to specific tokens rather than the altcoin market as a whole.

Given these changes, investors must conduct deeper analyses of individual altcoins rather than relying on overall market trends. Each project now requires close scrutiny of its fundamental metrics, technology, and real-world utility. While investors strive to find unique opportunities, many projects lack real value or application, leading to significant losses. For example, consider the recently hyped Trump altcoin, which failed to deliver. On the other hand, Ripple serves as a positive example, but it took over six years to achieve significant growth.

The dynamics of global liquidity (M2 money supply) are beginning to show signs of accelerated growth, which bodes well for Bitcoin and other altcoins. If M2 growth continues to accelerate, this will undoubtedly serve as a bullish signal for BTC, cryptocurrencies, and other risk assets. I've previously noted that the current M2 liquidity trend may be mirroring the patterns of 2016–2018, which fueled a bull market during that period.

Bitcoin buyers are currently targeting a return to $99,500, which opens the door to $100,900, with $102,900 just within reach. The ultimate target would be the high at $104,400, surpassing which would signify a return to a medium-term bull market.In the event of a correction, buyers are expected to step in at $97,900. A break below this level could quickly push BTC to $96,400, followed by $95,000. The furthest downside target would be $93,200.

A solid breakout above $3,123 clears the path to $3,196, with $3,264 just beyond. The ultimate target would be the yearly high at $3,314, surpassing which would signify a return to a medium-term bull market.In the event of a correction, buyers are expected to step in at $3,050. A drop below this level could push ETH quickly to $2,997, followed by $2,944. The furthest downside target would be $2,889.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.