By Ciaran Lyons; Source: Cointelegraph
A cryptocurrency venture capitalist has warned that market participants could be caught off guard by “some killer wicks” on the charts “once momentum gets going.” Altcoin markets have seen a massive rally since Donald Trump won the U.S. presidential election, but one venture capitalist has warned that near-term volatility could be in the cards as profit-taking activity among institutional investors increases.
Not all traders agree, however.
“Consider the altar season over for now,” Felix Hartmann, managing partner at Hartmann Capital, said in a Dec. 7 X post.
“Traders may continue to be irrational, but we are at a stage where teams and VCs are starting to clip more aggressively,” Hartman said.
“Once momentum turns, we’re going to have to take the leverage out and see some killer wicks,” Hartman said. He explained that the annualized funding rate for most altcoins is now “north” of 100%, and that the recent “movement is purely driven” by perpetual traders amid declining spot volume.
Hartman said: "It will be ugly."
Source Felix Hartmann
According to CoinMarketCap data, among the top 100 cryptocurrencies, the three altcoins with the highest gains since November 1 are Hedera (HBAR), up 99.31%; IOTA (IOTA), up 79.61%; and JasmyCoin (JASMY), up 72.47%.
In 2021, after a major surge in the altcoin market, some altcoins fell sharply within a few months.
In November 2021, Solana (SOL) reached $248.36, and by January 2022 it had plunged 64% to $89. XRP (XRP) also faced a plunge, losing about 51% in the same period.
However, other cryptocurrency traders believe that this is just the beginning of the altcoin season.
“This month through March seems logical,” pseudo-anonymous crypto trader MilkyBull Crypto said in a Dec. 6 X post.
“It lasts about 90 days,” he added.
Alt season has just begun,” the teacher told his 72,900 X followers.
Traders often monitor Bitcoin’s dominance as a key indicator of the start of altcoin season. At press time, Bitcoin’s dominance is 55.11%, down 7.88% over the past 30 days, according to TradingView.
On Dec. 4, Cointelegraph reported that 30-day funding rates for perpetual futures have risen sharply, with longs paying 4% to 6% per month to maintain leveraged positions, according to CoinGlass.
While these costs may seem manageable during a strong uptrend, they can quickly eat into traders’ profits if prices stagnate or fall.
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