The only way for the sickly altcoin market to get its groove back is by hitting rock bottom first.
Social media chatter about an altseason has collapsed to levels not seen in years, according to blockchain analytics firm Santiment. Typically that’s been the exact moment when altcoins start to rally.
“Thinking about an altseason right about now? Neither is anyone else,” Santiment wrote on March 3. “Historically, however, moments like these when social volume toward altcoin interest is at extreme lows are around the time that rallies begin.”
The idea is music to many traders’ ears. For years many have been waiting for a repeat of the 2017 initial coin offering boom when every token under the sun pumped by double-to-triple-digit multiples.
But this time, they’ve been sidelined. Price rallies have been mostly contained to Bitcoin and a select number of cryptocurrencies. Even Ethereum has been spared from the gains.
Altseason refers to the period of time when traders plough money into the cryptocurrencies apart from Bitcoin and push prices to staggering numbers in a very short amount of time.
Weekly mentions
Santiment analysed weekly mentions of altseason across a plethora of social media platforms over the past two years, comparing them to Dogecoin’s price.
The memecoin is a proxy for speculative altcoin interest.
A notable pattern emerged. Every time altseason mentions cratered, prices bottomed shortly after, and every time mentions spiked, prices topped.
XRP, the fifth-largest cryptocurrency, has historically been one of the first major altcoins to move when altseasons begin.
In 2017, it surged to about $3.80 from less than a penny in 2017. Later, during DeFi summer in 2021, XRP rallied to nearly $2 from $0.17.
What gives XRP its allure is that it combines a diehard retail fan base that has now tapped into institutional liquidity from exchange-traded funds linked to the cryptocurrency, making it a prime candidate to lead if Santiment’s pattern holds.
Moreover, Santiment explained how social volume forecasts price movements.
“When social volume toward ‘altseason’ gets high, this is commonly associated with tops,” Santiment wrote. “When conversations around ‘altseason’ hit rock bottom, that’s when large capital holders begin to typically pump the price.”
