In the second week of September, the altcoin season index surged to 80 points, indicating a significant shift in market dynamics. This spike signals the onset of the acceleration phase, known for attracting capital towards low-cap altcoins, often independent of major news influences.
On-chain analytics reveal that several altcoins with market caps below $200 million are witnessing a notable decrease in exchange reserves. This trend typically indicates increased accumulation, hinting at a potential bullish momentum in the altcoin market.
One key player, Euler (EUL), is a non-custodial, permissionless lending protocol operating on Ethereum. Launched in 2020 with a remarkable $40 million fundraising effort involving venture capital giants like Paradigm and Coinbase Ventures, Euler faced a significant setback in 2023 when a hack resulted in losses nearly totaling $200 million. Currently, EUL has a market capitalization of around $181 million, as reported by CoinMarketCap.
A recent strategic listing on Bithumb has revitalized interest among retail investors, showing a remarkable decrease in exchange reserves. According to Santiment, as of September 5, exchange reserves dropped to their lowest levels in a year, with only 289,000 EUL remaining available. This marks a reduction of over 500,000 EUL since the peak in August. Furthermore, Euler’s total value locked (TVL) exceeded $1.5 billion in September, reflecting a tenfold increase since the beginning of the year. The protocol’s TVL now outstrips its market cap by more than seven times, a sign that many investors perceive this as a bullish trend contributing to the plummeting exchange reserves. Investor Anze noted, “Not many protocols can run it back after a $200M hack. But you gotta give it to Euler Finance for the insane comeback journey.”
Another cryptocurrency gaining traction is COTI, which serves as a lightweight and rapid confidentiality layer on Ethereum. With a market capitalization below $120 million, COTI’s price has remained relatively stagnant at around $0.05 for the past few months. However, recent data indicates a sharp decline in exchange reserves, with only 812 million tokens left, nearing an annual low. This persistent decrease aligns with a downtrend in price, suggesting ongoing accumulation amid the sideways trading activity. If the anticipated capital rotation occurs during this altcoin season, tokens like COTI may find renewed interest from investors. COTI also saw a significant spike in TVL in July, with over 8 million tokens locked, valuing nearly half a billion dollars.
Robonomics Network (XRT) has also captured attention, especially as the intersection of cryptocurrency and robotics becomes a focal point for investment. Experts predict this sector might emerge as a significant contender for the upcoming altcoin season in 2025. Robonomics Network provides a range of open-source packages aimed at developers in robotics, smart cities, and Industry 4.0, yet it operates with a very small market capitalization of under $10 million and exhibits low trading volumes, introducing a higher level of risk.
Despite these risks, Santiment data indicates a positive sentiment around XRT. The price has stabilized around $2 since the start of the year, even as exchange reserves have increased. However, a decline in reserves in recent weeks suggests investors may be accumulating again. Those involved in this niche are optimistic, speculating that XRT could see a monumental increase of up to 100 times if the robotics sector gains significant traction.
As the altcoin season progresses, this confluence of factors—decreasing exchange reserves, significant growth in total value locked, and emerging sectors—could paint a promising picture for investors exploring opportunities in the altcoin market.
