Altcoin market experiences 50% increase, with meme coins and AI projects driving accumulation and speculation. Stablecoin supply surges as demand for altcoins rises.
The surge in value of all cryptocurrencies apart from Bitcoin (BTC) and Ethereum (ETH) has surged by a noteworthy 50% since Jan. 22, indicating a robust altcoin season, as highlighted in the “Bitfinex Alpha 94” report. The total market capitalization of the index has now reached around $640 billion, marking a significant increase from its lowest point during the bear market, which was approximately $450 billion. Despite concerns regarding market overheating, the altcoin sector has yet to surpass its previous peak in April 2022.
Bitcoin (BTC) has come close to reaching its all-time high, falling short by just 2.2% at the time of this writing, while the altcoin market still remains over 75% below its record level of $1.3 trillion. The altcoin market is distinguished by its rotational nature, with capital flowing across various sectors. Currently, there's a notable surge in accumulation and futures speculation within meme coins, particularly dog coins, and projects related to artificial intelligence.
Exchanges such as Binance and Bybit have witnessed over one-third of last week’s futures volume being attributed to dog coins, which include DOGE, WIF, PEPE, and BONK. Among these, the latter two, which aren't widely available for spot trading on centralized exchanges, have seen the highest trading activity. The term “Memecoin March Madness” has been coined to describe the frenzy surrounding these assets. The CoinGecko Meme Index itself has skyrocketed by 131% in the past week, now representing more than 7% of the total crypto market cap, excluding BTC and Ether.
The supply of stablecoins, which serves as an indicator of demand within the crypto market, has been steadily increasing since the beginning of the year. This rise in stablecoin supply reflects the growing demand for altcoins and other crypto assets. Although sectors like decentralized finance (DeFi) and gaming have experienced a decline in volume, dog coins and meme coins continue to climb, along with the futures open interest for cryptocurrencies that aren't listed on major exchanges.
Despite the potential for a leverage flush in these sectors, the momentum is anticipated to persist. For example, DOGE has recorded a 107% gain over the past 30 days, recently surpassing its previous bear market high. This increase is comparatively modest when compared to the 195% gain for SHIB, 225% for BONK, and an astounding 548% for WIF.