Altcoins
Why It’s Time to Wait on Altcoins, Experts Warn
- Bitcoin’s drop below $59,000 has triggered significant market liquidations, with altcoins having a particular impact.
- Analysts advise caution, suggesting a pause in altcoin accumulation due to current market uncertainties and weak signals.
In a dramatic 24-hour period, the global cryptocurrency market witnessed a sharp decline of 4.7%, led by a significant decline in Bitcoin [BTC] price, which fell below the critical threshold of $59,000.
This drop has had repercussions on the market, with serious repercussions on altcoins.
As Bitcoin struggles to maintain its foothold, the altcoin sector has seen a substantial reduction in market capitalization, from $1.03 trillion at the start of this month to just $953 billion at press time.
Bitcoin’s recent drop below $59,000 marks a critical moment in the cryptocurrency market, reflecting broader uncertainty and triggering widespread selling.
The downtrend has cast doubt on the continued health of the bull market, with Bitcoin repeatedly testing support levels, an indicator of potential market weakness.
In Crypto Banter’s “The Ran Show”, analysts highlighted Bitcoin’s precarious position at the bottom of its trading range, suggesting that repeated retests of these levels could signal an impending market shift.
Stay away from altcoins
In these tumultuous market conditions, experts advise traders to exercise caution, especially with altcoins.
Recent trends and market data suggest a cooling period for altcoins, which have been significantly impacted by Bitcoin’s prolonged price adjustments.
Crypto Banter analyst noted that while altcoins typically go through recovery periods, current market conditions are not conducive to immediate rebounds.
Using It hangs [PENDLE] For example, the analyst revealed that the altcoin saw a significant decline not due to protocol issues, but due to external market pressures, which demonstrates the volatile nature of altcoin investments in uncertain times.
The analyst’s advice is to focus on reliable on-chain data and avoid being influenced by fleeting social media trends.
Crypto Banter analyst also mentioned FTX’s recent move, which could potentially return more funds to users than they initially lost, suggesting a positive shift in market liquidity that could support the recovery.
Comparing Bitcoin’s market cap growth to that of major financial institutions and traditional assets like gold, the analyst reinforced Bitcoin’s long-term value proposition despite short-term volatility.
Solana: A Case Study in Volatility
While the analyst advised caution with altcoins, it makes sense to look into them Solana [SOL]the third largest altcoin on the market, as a specific case of the impact of the market crisis on altcoins.
Solana has been hit hard; in the last 24 hours alone, SOL’s price has dropped by 7.3%, trading at $134.83 at press time. This decline followed a brief rally tied to enthusiasm for potential ETFs.
This decrease in Solana’s value has had a significant effect on traders. According to Coin glassIn the last day, 106,449 traders faced liquidations totaling $289.26 million.
Of these, Solana-related liquidations totaled approximately $12.55 million, predominantly from long positions. Specifically, Solana’s long liquidations totaled $10.76 million, compared to $1.80 million from short positions.
Source: Coinglass
Light Bitcoin [BTC] Price forecast 2024-25
Recession seems to be affecting Solana’s on-chain activity. AMBCrypto’s analysis on Solcancro indicated a sharp decline in the number of active addresses.
From over 1.2 million addresses last month, the number has dropped to 882,000 at the time of writing, highlighting a decline in user engagement in the current market conditions.
Source: Solscan