XRP leads the way, classic coins rebound: Is the altcoin season returning?

Author: Chandler, Foresight News

The price of Bitcoin has repeatedly hit new highs, breaking through the $99,000 mark, which has invigorated the entire cryptocurrency market. Established altcoins are also making a comeback, with Ripple (XRP) standing out in particular. According to Bitget market data, on November 22, XRP broke through 1.4 USDT, currently quoted at 1.416 USDT, with a 24-hour increase of over 30%.

Compared to the booming Meme market, established altcoins seem to be quietly rising. They do not attract as much attention as Meme coins but are accumulating market interest with steady gains.

According to Kaiko data, as of November 18, the weekly trading volume of altcoins surged above $300 billion for the first time since 2021. Among them, the trading volumes of the four major tokens—DOGE, XRP, SOL, and PEPE—account for 60% of the total trading volume.

Since November, XRP has quietly risen from around $0.5 to a peak of $1.435, an increase of 182.4%, reaching a new high in over three years; ADA has risen from $0.33 to $0.9, with an increase of nearly 170% this month; XLM has increased from $0.09 to $0.294, with a rise of over 220%. These signs seem to indicate that established altcoins are gradually shaking off their sluggishness and reshaping their market positions through actual performance.

If this trend continues, the revival of established coins intertwined with the activity of hot tokens may lead to a broader "altcoin season" in the future.

Gary Gensler Announces Upcoming Resignation, Years of Litigation May End

The recent strong rise of XRP is underpinned by multiple intertwined factors. Changes in market sentiment are undoubtedly the most direct driving force.

On July 13, 2023, when the court ruled that XRP sales on digital trading platforms were not considered securities, Ripple achieved a partial victory. However, the court determined that XRP sold to institutional investors by Ripple was classified as unregistered securities. Additionally, the court ruled that the personal XRP sales by Garlinghouse and Larsen did not constitute violations. On August 7, 2023, the court made a final ruling requiring Ripple to pay a civil penalty of $125.0351 million and prohibiting the company from further violating the Securities Act.

On October 3, the U.S. SEC announced that it was appealing the previous ruling by the U.S. Second Circuit Court of Appeals regarding Web3 payment company Ripple. An SEC spokesperson stated that "the district court's ruling in the Ripple case conflicts with decades of Supreme Court precedent and securities law, and we look forward to presenting our arguments in the Second Circuit Court."

However, with Trump's election victory, this regulation may ease.

On November 22, according to the official SEC website, SEC Chairman Gary Gensler will officially resign on January 20, 2025. The market has begun to anticipate changes in the future regulatory environment, and lawsuits against companies like Ripple may soften, settle, or even be withdrawn.

Gary's long-standing strict regulation of the crypto industry, especially Ripple, has kept XRP in a dual predicament of legal and market challenges. Now, signs of a potential easing of this regulatory stance provide the market with an opportunity to reassess XRP's value.

From the data, according to CoinGlass, the open interest (OI) of XRP futures contracts has approached $2.44 billion, setting a new historical high. This data reflects that market speculation on XRP has reached unprecedented heights. Open interest refers to the total amount of active futures or options contracts that have not yet been settled, and is often seen as an important indicator of market activity and trading enthusiasm.

Institutions Compete to Launch ETFs

In addition to regulatory easing, several institutions have begun applying for XRP ETFs.

On October 2, a spokesperson for Bitwise confirmed that Bitwise submitted an XRP ETF application, which has been officially filed on the Delaware government website. According to its S-1 registration document submitted to the U.S. SEC for its XRP ETF, the XRP custodian will primarily use cold storage to hold the trust's assets, transferring a limited number of assets to hot storage as needed for effective basket creation and redemption.

A week later, cryptocurrency investment firm Canary Capital submitted a registration application for the XRP spot ETF "Canary XRP ETF" to the U.S. SEC. The plan is to provide investors with an investment channel that does not require direct holding of XRP, while using CME's CF Ripple Index as the price tracking benchmark. Its founder, Steven McClurg, stated that the positive changes in the regulatory environment and investor demand for diversified crypto assets are the main reasons driving this application.

On October 16, Grayscale Investments submitted an application to the U.S. SEC to convert its mixed crypto fund Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF). As of September 30, this fund was primarily composed of Bitcoin, accounting for 74.7%, followed by Ethereum at approximately 18.55%, with the remainder made up of SOL, XRP, and AVAX. The company had previously converted its Bitcoin and Ethereum funds into ETFs.

On November 2, 21Shares submitted an application for the XRP ETF "21Shares Core XRP TRUST" to the U.S. SEC.

These continuous applications indicate that XRP's market position as a crypto asset is steadily recovering, reflecting the market's confidence in XRP's future potential. After achieving phased progress in the legal dispute between Ripple and the SEC, concerns about XRP's legality have eased. Against the backdrop of Bitcoin and Ethereum ETFs being approved one after another, the wave of XRP ETF applications is undoubtedly an important signal of progress for the industry.

Is an Altcoin Comeback Possible?

The CMC Cryptocurrency Altcoin Season Index is a real-time indicator used to determine whether the current cryptocurrency market is in an altcoin-dominated season. This index is based on the performance of the top 100 altcoins relative to Bitcoin over the past 90 days, providing detailed charts and metrics to track market trends and the market capitalization share of altcoins.

From the chart and index data, the CMC Cryptocurrency Altcoin Season Index currently shows 27/100, indicating that the market is still primarily dominated by Bitcoin, and altcoins have not yet fully entered a strong dominant position. However, the trend of change over the past seven days is noteworthy. The altcoin season index has gradually risen from a low point on the 17th, significantly jumping to 28 on the 21st, indicating that market interest in altcoins is reviving.

Combining historical data, although the current index is far below the annual high of 50, it has shown a significant rebound from the low point of 13 at the beginning of this month. This upward trend may suggest that market funds are gradually rotating from mainstream assets like Bitcoin to the altcoin sector. Especially with the recent strong performance of established altcoins like XRP and ADA, this trend may further strengthen.

At the same time, the market capitalization of altcoins is also steadily growing. Although the growth rate has not yet reached a level sufficient to completely reverse the market landscape, the gradual stabilization and slight increase reflect subtle changes in market sentiment. Investors are beginning to reassess the value of altcoins and gradually shifting their attention to these assets.

If this trend can continue and maintain a stable rise in the coming weeks, perhaps the altcoin season may officially arrive.

However, based on the performance of the Top 100 over the past 90 days, Meme coins, with their high speculation and social drive, still find it difficult to be shaken from their market position in the short term.