Hedera, IOTA, and JasmyCoin have shown significant growth in the cryptocurrency market since Nov. 1, recording gains of 99.31%, 79.61%, and 72.47%, respectively, according to CoinMarketCap data. This has led to speculation about the onset of an altcoin season, especially as Bitcoin’s dominance has fallen by 7.88% over the past month to 55.11%. Analysts like MilkyBull Crypto and Sensei suggest this trend could continue into early 2025, although others remain cautious about the sustainability of these rallies.
One factor contributing to the current market environment is the increasing funding rates in perpetual futures markets. Data from CoinGlass indicates traders using leverage are facing annualized costs of 48% to 72% to maintain their positions. While these costs may not seem prohibitive in an uptrend, they could trigger sell-offs or forced liquidations if the market stabilizes or dips. Felix Hartmann of Hartmann Capital warns that such conditions mirror those of late 2021 when coins like Solana and XRP experienced rapid corrections after extended rallies. He notes that funding rates exceeding 100% annually signal rising risk in a market already marked by declining spot trading volumes and heightened leverage.
Bitcoin’s climb above $100,000 has further influenced the market. While some celebrate this milestone as a bullish indicator, others urge caution. Sergei Gorev from YouHodler highlights Bitcoin's correlation with the S&P 500, noting that its movements could ripple through the cryptocurrency market. He also points to divergences in technical charts and the rising USD exchange rate as signals that the rally may not be sustainable. Historically, round-number milestones for Bitcoin have triggered periods of increased volatility, adding another layer of uncertainty.
Despite these concerns, optimism around the altcoin market remains high. Some traders argue that the current conditions could lead to a sustained bull run, while others believe historical trends and rising funding costs suggest a potential pullback. The ongoing divergence of opinions underscores the unpredictable nature of the market at this stage.
As the situation develops, traders and investors are keeping a close eye on key factors such as funding rates, Bitcoin’s dominance, and broader macroeconomic influences. Whether the market sustains its upward momentum or faces a correction depends on how these dynamics evolve in the coming weeks. For now, the cryptocurrency market remains at a crossroads, between the promise of further gains and the risks of heightened volatility.
