Things are getting seriously bumpy in the markets!
After a stellar run from October to March, the crypto market has hit a rough patch. While Bitcoin and Ethereum are weathering the storm somewhat, smaller altcoins are taking a nosedive. Sentiment in online forums is turning sour, with many altcoin prices plummeting. But is this just a temporary correction, or the start of a longer-term slump for altcoins?
Dive deeper to get the inside scoop on the altcoin market and what it means for your investments.
Bitcoin and Ethereum are currently trading just 15% below their yearly highs. On the other hand, major altcoins like Solana and Avalanche have plummeted by 40% to 50% from their March peaks. Layer-1 tokens such as SUI and Aptos have seen even steeper drops, crashing by 60% to 70%. Experts attribute this sharp decline to token unlocks, venture capital sell-offs, and a lack of fresh capital entering the market.
One of the major challenges for altcoins is the continuous increase in token supply due to scheduled unlocks. For example, Solana’s daily token supply increases by 74,000 tokens, equivalent to about $10 million at current prices. This influx of tokens, combined with venture capital firms selling off their initial investments, is putting downward pressure on prices.
Adding to the woes is the stagnant liquidity inflow into the crypto market. The stablecoin market cap surged by $30 billion earlier this year but has remained flat since April. This indicates reduced trading activity and a decline in investor interest across stablecoins like USDT, USDC, FDUSD, and DAI.
Looking at the combined market cap excluding Bitcoin and Ethereum, June continues to be a challenging month for altcoins in 2024. As of June 22, 2024, the aggregated market cap stands at $594.967 billion, reflecting a significant 14.30% drop in just one month. This contrasts sharply with the peak of $706.676 billion earlier in June and the year’s high of $775.36 billion on March 31.
As the cryptocurrency market consolidates, smaller altcoins are grappling with unprecedented challenges.
Thinking of buying the dip in altcoins, or waiting for clearer skies? Let us know your strategy!
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