Altcoin FOMO reignites among retail traders, Ethereum futures open interest hits new high
Altcoin season delayed amid lack of fresh retail capital
The anticipated "altcoin season," marked by rapid price growth in alternative cryptocurrencies, remains elusive due to a lack of new retail capital, according to Ki Young Ju, founder and CEO of CryptoQuant. Ju argues that institutional funds are currently locked in major assets like Bitcoin (BTC) and Ethereum (ETH) through exchange-traded funds and other investment vehicles.
“For altcoins to reach a new all-time high market capitalization, they will require a significant influx of fresh capital to crypto exchanges,” Ju stated. He highlighted that the current altcoin market cap remains below its previous peak, indicating reduced liquidity from new exchange users.
Retail FOMO as a catalyst
Ju emphasized the importance of reigniting retail "fear of missing out" (FOMO) to drive altcoin prices higher. Smaller-cap altcoins, in particular, depend on retail investors rotating into riskier assets for growth. Analyst Willy Woo echoed this sentiment, noting that while altcoin seasons will likely weaken with each market cycle, smaller and mid-cap altcoins could still see significant gains following Bitcoin rallies as investors seek higher-risk, higher-return opportunities.
Indicators suggest that retail traders may already be returning to the market. Open interest in Ethereum futures reached a record high on November 27, signaling increased market engagement. Additionally, retail investors purchased approximately $100 million in MicroStrategy shares in the past week, viewing the company as a leveraged Bitcoin bet.
Despite challenges, Ju remains bullish on altcoins but suggests they need to develop independent strategies to attract new capital instead of relying on Bitcoin’s momentum. With heightened interest in Ethereum and surging retail participation in crypto-related equities, a potential spillover effect into altcoins could set the stage for the next wave of growth.
The delayed altcoin season underscores the need for innovation and targeted strategies in the crypto market, as retail capital remains a key driver of price momentum.
Therefore, it is no surprise that the Altcoin Season Index jumped to 59 as Ethereum's price surpassed $3,400.
