- Altcoins like Hedera and IOTA have surged significantly, but analysts warn of potential corrections as institutional profit-taking rises.
- As future expirations and market cycles suggest increased volatility, Bitcoin’s historic milestone is tempered by caution.
- Elevated funding rates exceeding 100% annualized for altcoins signal heightened leverage, raising concerns about market sustainability.
The altcoin market has recorded significant gains, particularly after Donald Trump’s victory in the recently held U.S. presidential election. However, venture capitalist Felix Hartmann, the managing partner at Hartmann Capital, has raised concerns, noting that the rally might slow soon.
Rising Funding Rates and Profit-Taking
Felix Hartmann, managing partner at Hartmann Capital, expressed concerns about the sustainability of the altcoin rally. In a post on X, Hartmann pointed out that funding rates for many altcoins now exceed 100% annualized, indicating increased leverage among traders. He attributed the recent price surges to activity in perpetual futures markets rather than organic spot trading volume.
Hartmann warned that this dynamic could lead to dramatic market corrections, commonly called “murder wicks,” where prices experience sharp and sudden declines. He noted that institutional investors and cryptocurrency project teams have started taking profits more aggressively, adding pressure to the market.
Despite these cautionary signals, some traders remain optimistic, believing the altcoin season has more room to run.
Impressive Altcoin Gains
Data from CoinMarketCap highlights the significant gains achieved by several altcoins since November 1. Hedera (HBAR) surged by 99.31%, IOTA gained 79.61%, and JasmyCoin (JASMY) climbed 72.47%. These gains have been accompanied by Bitcoin dominance, an indicator of how relatively other coins have performed to Bitcoin, falling back to 55.11% from a position of 63.99% one month ago.
Higher funding rates for perpetual futures also indicate a bull-leaning market among traders. According to CoinGlass, leveraged traders pay 4%–6% monthly to maintain their positions, a potential signal of confidence in continued upward momentum. However, Hartmann’s analysis suggests that the rally could be nearing its peak, echoing past cycles where steep corrections followed rapid gains.
Bitcoin is likely to swing as the futures expire.
Meanwhile, altcoins are grabbing the spotlight. However, market participants are feeling interested in Bitcoin which has risen above 100K. However, analysts are calling for caution since futures and options contracts are due within two weeks, which increases market risks. Sergei Gorev, Head of Risk at YouHodler, highlighted the impact of these expirations, noting that key market cycles often influence Bitcoin’s price dynamics.
Gorev also pointed to Bitcoin’s correlation with the S&P 500, approaching what he described as an “overheating phase.” Signs of strain in broader financial markets and a rising USD exchange rate could weigh on Bitcoin’s rally.
Although further price growth is possible, analysts expect a significant correction as the market adjusts to evolving conditions. Traders are advised to remain cautious as Bitcoin’s price momentum faces critical resistance levels.
