Altseason faces delays due to limited retail capital inflow

CryptoQuant CEO Ki Young Ju has highlighted the lack of fresh retail capital as a primary reason for the delayed onset of altseason, the period marked by rapid price increases in altcoins following a Bitcoin bull run.

Ju explained that institutional investors, whose funds are tied up in exchange-traded funds (ETFs) or blue-chip assets like Bitcoin (CRYPTO:BTC) and Ether (CRYPTO:ETH), are unlikely to rotate their gains into altcoins.

“For altcoins to reach a new all-time high market capitalisation, they will require a significant influx of fresh capital to crypto exchanges,” he stated.

The current altcoin market capitalisation remains below its previous all-time high, reflecting reduced liquidity from new users entering the market.

Ju suggested that altcoins should focus on developing independent strategies to attract new capital instead of relying solely on Bitcoin’s momentum.

Despite these challenges, Ju maintained a bullish outlook on altcoins.

The phenomenon of retail fear of missing out (FOMO) is central to attracting the fresh liquidity needed for an altseason.

Popular trader Willy Woo recently noted that altcoin seasons are becoming weaker with each market cycle.

Woo attributed this to diminishing retail participation compared to the peak of the 2017 altcoin bubble.

“There will be echo fractals of mid-caps and low-caps pumping after BTC pumps as investors chase returns higher on the risk curve,” he remarked.

Signs of increased retail activity are emerging.

On November 27, Ether futures open interest reached an all-time high, signaling growing market enthusiasm.

Retail investors also purchased $100 million in MicroStrategy shares in the past week, further indicating heightened interest in crypto-related assets.