Top Reasons Behind the Recent Altcoin Flash Crash

Analyst Connor Kenny finally addressed the question on everyone’s mind: why were altcoins dropping so sharply in this market? What’s happening with Bitcoin, and is there any opportunity left to capitalize on?

He explained that Bitcoin has recently hit its lower support level, which is crucial to hold for a bullish outlook. He said that despite appearing overly optimistic to some, he had anticipated a bearish scenario that would bring Bitcoin down to $60k

Altcoin Market Analysis

Why were altcoins dumping and will the bloodbath repeat again? Here are few reasons brought to attention by the analyst:

Lack of Narrative: In Q1, meme coins were pumping due to pre-sale hype. Although meme coins are still active, the momentum isn’t as strong. In Q2, Real-World Assets (RWA) coins surged because of BlackRock’s entry into the RWA space. Currently, there’s no strong narrative driving new liquidity into the market.

Crypto Search Trends: Over the last five years, interest in crypto has waned significantly. The current search volume is very low, indicating that retail investors are largely absent. This absence of new retail investors, while seemingly negative, can be seen as positive because major assets like Bitcoin and Solana are still holding significant value.

Ethereum Trading Delay: There’s been a delay in Ethereum’s trading, causing short-term memory loss in the crypto community. This delay could last another three weeks, but altcoins are expected to rally once Ethereum moves.

Greed in the Market: There’s excessive greed with many celebrities launching their own meme coins and promoting their significant profits. The market has shown numerous signs of greed, such as profit and loss screenshots from retail investors boasting million-dollar gains from meme coins.

He pointed out that although the current market scenario is challenging and painful, there are still strategies to navigate through it, either by holding strong or strategically trading based on market sentiments.

Also Read: Top Analysts Predict Final Crypto Capitulation Before Major Recovery, Comparing 2024 to 2016