The current altcoin season, which began with the Dogecoin price rally, may have slowed down for now. Altcoins like ADA, BCH, LTC, ETH, LINK and VET are currently offering double-digit gains compared to last week’s prices. The growing interest in altcoins across the exchanges is the key driver of prices.
The other factor is the reserve on the spot exchanges. Altcoin whales have been observed to move their assets from centralized exchange wallets to other wallets before the price rally started. In the following graphic you can see, based on data from CryptoQuant, the average amount of outflows across all exchanges for AAVE, SUSHI, LINK, UNI, BAT and SNX.
Data for altcoins shows significantly increasing (and dumping) levels of whale addresses appearing on their respective networks; the rising pattern is clear. The currency reserves cannot be used to determine whether BNT, CEL, SKL, RDN, SUSHI & YFI are falling on the bullish or bearish side. To determine this, traders are likely to consider volatility, social volume, and the price ratio between the altcoins.
The social volume fell in the past week, but the declines correspond to price increases. In terms of social volume, SUSHI is one of the top altcoins, but this is not the case with UNI, BAT or AAVE. These altcoins have high volatility and network activity. LINK’s social volume has a similar relationship to its price as SUSHI.
For retailers, a combination of social volume and foreign exchange reserves pays attention to trend reversals in altcoin rallies. However, there is a subtle difference between an overvalued asset and an asset that is sufficiently overvalued to sell short.
This difference was determined on the basis of the price development and the short sale data, there are currently no signs of exhaustion on the futures market. It may have slowed down on Bitcoin and top altcoins, but there are no signs of slowing down for ETH, making it one of the top altcoins likely to sell short in the short term.
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