Altcoin ‘Euphoria’ Phase Predicted as Market Cap Rises 16%—Trader

• TOTAL3 must rise 16% to surpass $1.13T for altcoin market euphoria, currently at $962.78B, up 91.45% since January 2024.
• Short-term trading dominates crypto, slowing token breakouts compared to prior cycles, as noted by Syncracy Capital’s Daniel Cheung.
• Bitcoin’s 60% dominance prompts traders to shift focus to altcoins, seen as offering better risk-reward potential in current conditions.

The total market capitalization of altcoins, excluding Bitcoin and Ether, must increase by approximately 16% before the market enters a euphoric phase, according to a crypto trader. 

Pseudonymous analyst Daan Crypto Trades outlined this perspective in a December 28 post on X. He noted that the “mania” phase for altcoins would likely begin once the TOTAL3 index surpasses its 2021 all-time high of $1.13 trillion and enters price discovery.

At present, the TOTAL3 index stands at $962.78 billion, marking a 91.45% increase since the start of 2024. TradingView data confirms this current valuation. Despite the significant growth, the index remains in a volatile zone between $840 billion and $1.1 trillion. 

Also, Daan remarked that the market would likely stay choppy unless the index breaks out of this range. He also warned of potential caution if the index falls below $800 billion.

Traders Focus on Short-Term Strategies

Notably, market analysts have observed heightened volatility in the crypto market, which they attribute to a shift in trader behavior. Daniel Cheung, co-founder of Syncracy Capital, highlighted that many traders now focus on hourly chart movements and leverage. 

In addition, in his December 28 post on X, Cheung explained that this short-term outlook has slowed token breakouts compared to earlier market cycles. Such trading behavior is seen as a contributing factor to the market’s uneven performance. While some tokens have achieved significant gains, others remain stagnant. 

According to CoinMarketCap, the top performers among the top 100 cryptocurrencies over the past week were Bitget Token (BGB), Virtuals Protocol (VIRTUAL), and Pudgy Penguins (PENGU). These tokens rose by 80.65%, 42.30%, and 31.63%, respectively.

Bitcoin Dominance Signals a Shift in Accumulation Strategies

Furthermore, Bitcoin’s market dominance has climbed to nearly 60% during the last week of 2024, signaling a potential pivot in trader strategies. Several traders now argue that altcoins may present better risk-reward opportunities than Bitcoin at this stage. 

Similarly, Pseudonymous trader Dyme expressed this view in a December 27 post, suggesting that the time to dollar-cost average Bitcoin has passed for the next 1.5 years.

Moreover, the growing dominance of Bitcoin amid its price stall has prompted traders to redirect their focus to altcoins. Many believe these alternative assets offer more substantial returns under current market conditions. This sentiment adds further anticipation for the next significant movement in the altcoin market.

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