Altcoins will exit the “danger zone” and explode

With the recent decline of Bitcoin, the cryptocurrency the market has been turned upside down. Bitcoin, which was trading at around $67,000 last week, fell more than 2% to $65,100 during U.S. trading hours. It has lost 7.5% in the last seven days. When the price of Bitcoin drops, other cryptocurrencies, namely altcoins, usually follow this decline. What are the reasons for this collapse and the predictions for the future, what do the experts say?

Reasons for the collapse of altcoins

Cryptocurrency Analyst Michaël van de Poppe, nicknamed “Crypto Michaël”, touches on important points about the future of the market as he examines the altcoin’s collapse. Poppe points out that major altcoins have lost more than 40% of their value in the last two weeks, while on-chain altcoins have seen a decline of more than 70%. Furthermore, drawing attention to the impact of Bitcoin’s dominance on altcoins, Poppe predicts that a reversal of Bitcoin’s dominance could herald a new altcoin rally.

At this point, many people in the cryptocurrency the market is wondering why altcoins fell so sharply. The answer is up to the experts! Van de Poppe underlines the following things:

• Expectations and uncertainty about the Ethereum Spot ETF: According to Poppe, one of the main reasons for the collapse is uncertainty over spot Ethereum ETFs in the US. As we reported how Cryptokoin.com, these ETFs have not yet been listed, despite receiving approval from the US Securities and Exchange Commission (SEC). This situation causes confusion in the market and negatively affects market psychology. Poppe explains that the ETF approval process consists of two phases: Forms 19b-4 (which cover technical details and SEC compliance) and Forms S1 related to the IPO. The delay in listing puts downward pressure on the market. Poppe believes that once Ethereum spot ETFs are listed, Ethereum could be classified as a commodity, similar to Bitcoin. This classification could increase institutional investment and lead to wider acceptance of Ethereum and other cryptocurrencies.
• Market impact of macroeconomic factors: Poppe says the lower-than-expected US inflation data initially signaled a pause in the process of the Fed interest rate hikes, but the Fed’s aggressive stance continued to unsettle the market. Altcoins perform best in low interest rate and high liquidity environments, but these environments do not exist at the moment. The dollar, which has strengthened with recent interest rate cuts by the European Central Bank (ECB), appears as another factor suppressing the cryptocurrency market.

When is the market return expected?

Despite the negative market psychology, there are signs of a potential recovery. Poppe remains optimistic that there could be a turnaround in the market within the next 1-2 weeks. Emphasizing that altcoins underperform due to the pressure of Bitcoin dominance on altcoins, Poppe once again highlights that a turnaround Bitcoin Dominance could herald a new altcoin rally.

Poppe also underlines this That of Ethereum support levels, which he says are important for a potential reversal against Bitcoin. However, he does not refrain from underlining that macroeconomic indicators such as the strengthening of the dollar and US Treasury bond yields also influence market movements.

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