The excitement and fear of missing out (FOMO) around a potential altcoin market surge have significantly subsided in recent times. On-chain data analysis suggests that the rising mentions of "altseason" often coincide with market peaks, indicating that traders may have become overly optimistic about the prospects of alternative cryptocurrencies.

Cooling FOMO and Shifting Sentiment

After the market peak in March, the FOMO around altcoins has dropped considerably. According to Santiment data, the current atmosphere of crowd fear could be a sign that the market is nearing a bottom, presenting a valuable opportunity for investors.

Furthermore, the sentiment around large-cap altcoins like Shiba Inu (SHIB), Dogecoin (DOGE), and XRP has also seen a significant decline following their recent price drops. Santiment notes that this shift in sentiment could signal a potential buying opportunity for patient traders.

The Importance of Fed Policy

Despite Bitcoin's price flirting around its all-time highs, most altcoins have continued to trade below their peaks. Renowned crypto analyst Benjamin Cowen suggests that the enthusiasm for an imminent altcoin bull run may be premature, as a significant rally is unlikely until the US Federal Reserve begins cutting interest rates again.

Historically, altcoins have delivered strong returns following the Fed's rate cuts. Cowen emphasizes the need to closely monitor the advance/decline index, as its sharp decline before the Fed's rate cut in 2019 mirrored the current situation, cautioning that the anticipation of an altcoin season dominating Bitcoin may be premature without a reduction in interest rates by the Fed.

As the FOMO levels reach their 2024 lows, investors who have been waiting on the sidelines for the market to cool off might consider deploying fresh cash, but they should remain cautious and vigilant, as the path forward may be influenced by the Federal Reserve's monetary policy decisions.