Altcoins

Analysts Discuss the Risks of Buying Altcoins Today

Published

8 months ago

16 June, 2024

Analysts Warn Against Buying Altcoins: Times Have Changed

The cryptocurrency market has seen significant changes, leading many analysts to caution against investing in altcoins.

Historically, bull markets have seen Bitcoin and Ethereum rise first, followed by altcoins. However, current conditions suggest a change in this trend.

Why buying Altcoins now is risky

Quinn Thompson, founder of crypto hedge fund Lekker Capital, informed against invest in altcoins Right now. He pointed to several indicators of market instability, including high leverage and open interest, a lack of panic-driven buying, and market stagnation. stable coin provide.

He believes the market is under increased selling pressure, particularly from venture capital funds that need to raise capital, leading to more selling than buying. This situation, combined with low summer trading volumesmakes it difficult for altcoins to gain traction.

“I think there is serious cascading risk in crypto and, in particular, I expect most altcoins to be delisted. The market appears to have lost any ability to rebound, even at the majors, while at the same time leverage and open interest remain high,” Thompson said.

Altcoin Market Depth. Source: Kaiko

Thompson identified two main reasons for his position. First, the impact of Bitcoin and Ethereum Exchange Traded Funds (ETFs) and the question of altcoin supply inflation.

The introduction of Bitcoin and Ethereum ETF changed the structure of the market. In the past, capital flowed from major cryptocurrencies like Bitcoin and Ethereum to altcoins during bull markets. However, with over $50 billion now invested in Bitcoin ETFthese funds do not have similar mechanisms for investing in altcoins.

This change has limited the capital available for altcoins, making it more difficult for them to increase in value. According to Samara Epstein Cohen, director of ETF investments at BlackRock, more and more traditional market participants are to focus on Ethereum for tokenizationwhich further marginalizes altcoins.

Learn more: How to Invest in Real World Crypto Assets (RWA)?

Bitcoin ETF Holdings. Source: CryptoQuant

The rapid launch of new altcoins has also flooded the market, creating significant inflationary pressures. Many projects release large amounts of tokens aggressively, resulting in supply that far exceeds demand.

Thompson pointed out that there was a lack of demand to support the monthly altcoin supply inflation of around $3 billion expected over the next two years. Even though some altcoins may still perform well, identifying these successful tokens will be more difficult than in previous years.

“Altcoins are experiencing a constant stream of selling pressure. As we enter an already low volume summer period, the combination of a large token supply unlock and selling pressure from venture capitalists will likely be too much of a battle for most tokens” , concluded Thompson.

Meanwhile, Will Clemente, co-founder of Reflexivity Research, reflected on the maturity of the market. In 2020, invest in high beta altcoins were profitable strategy because these assets outperformed Bitcoin. However, this approach is no longer effective.

Many altcoins have underperformed Bitcoin in recent months, indicating that market dynamics have changed.

“In 2020 you get into the risk spectrum, these things are going to have a higher beta than Bitcoin and you just get long, all the vaporware and stuff goes up. We didn’t see that this time. A lot of the altcoin-Bitcoin pairs have been bleeding for several months now and it hasn’t really been as simple as buying any vaporware altcoin and you’ll outperform Bitcoin,” Clemente pointed out.

Technical analyst Michaël van de Poppe Underlines that Bitcoin is near or at an all-time high, while most altcoins have not reached their previous highs. This gap indicates a lack of confidence in altcoins, which continue to struggle in the current market environment, suggesting that the days of easy gains from altcoins may be over.

Learn more: 10 Best Altcoin Exchanges in 2024

Investors should be aware of increased risks and take new conditions into account before making decisions in the cryptocurrency market.

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Altcoins

Long-Term Impact of Ethereum ETF on Cryptocurrency Market

Published

6 months ago

29 July, 2024

CoinFlix Staff

Long-Term Impact of Ethereum ETF on Cryptocurrency Market

Popular crypto analyst Michael van de Poppe has highlighted his altcoin portfolio approach in light of the new Ethereum ETF. In a recent Youtube videoThe analyst explained the measures he would take for this major market event.

The Ethereum ETF was listed on the stock exchange and it took time to get approval and so far there has been no significant change in price. The analyst pointed out that the long-term effect could be quite significant, comparing it to the situation of the Bitcoin ETF where the initial decline was followed by large inflows.

According to Van de Poppe, the Ethereum ETF’s trading volume on the first day of trading was about 25% of the volume Bitcoin ETF He noted that the first day of trading was marked by low inflation, and said there was a net inflow of $150 million to $160 million, which reduced the available supply.

Altcoins are poised for growth

The analyst said that as Ethereum adoption increases in the future, the supply of Ethereum will decrease, which is a deflationary model. Ethereum is up about 15% since the ETF approval, the broader market reaction has yet to happen as several sell-offs have taken place, including the Grayscale Trust.

Van de Poppe also mentioned other important market events, including the end of Mount Gox The process of repaying creditors initially caused tensions in the markets, but had little effect subsequently. It also highlighted the role of macroeconomic factors, which can lead to Fed rate cuts, which can affect markets.

In this regard, looking at van de Poppe’s strategy, he is still keen to trade within the altcoins of the Ethereum ecosystem. He stated that there is a possibility of short-term price fluctuations that may discourage many people, but the long-term still looks good due to the improvement and adaptation that has been made to Ethereum and its environment.

According to the analyst, substantial inflows could propel Ethereum towards new historic highs with estimates ranging from $5,000 to $7,000. Despite the current market fluctuations, he is confident that macroeconomic changes and greater liquidity will be favorable for altcoins.

He explained that his broad approach to altcoins, especially those associated with Ethereum, will be beneficial because the market will react differently to these events. The basis for his optimism comes from the fact that he believes that Ethereum and all associated projects are still extremely undervalued and have the potential to skyrocket as sentiment changes.

Looking ahead and market adjustments regarding the Ethereum ETF and other macroeconomic factors, the analyst remains bullish on altcoins. He suggested investors stay informed and believe that in the ever-changing world of crypto, they will eventually be rewarded.

Fuente

Altcoins

Altcoins Are Severely Undervalued, Awaiting Ethereum Move | Flash News Detail

Published

6 months ago

28 July, 2024

CoinFlix Staff

IntoTheBlock Releases Report on Institutional DeFi Trilemma

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Fuente

Altcoins

Altcoins Correct Amid ETH Decline, Grayscale Outflows | Flash News Detail

Published

6 months ago

28 July, 2024

CoinFlix Staff

Disclaimer

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Altcoins

Epic Altcoin Rally Expected for August and September

Published

6 months ago

28 July, 2024

CoinFlix Staff

Crypto analyst predicts massive altcoin rally similar to Q1 2024, urging patience and accumulation.
Bitcoin’s potential as a reserve asset and its technical patterns suggest that it will drive the rise of the cryptocurrency market.

Captain Faibik, a renowned crypto analyst, has created excitement in the cryptocurrency sector with his latest prediction. He indicated that we are on the cusp of a massive altcoin rally, similar to the one we saw in Q1 2024.

We are on the verge of a massive Altcoin rally, similar to Q1 2024📈

Keep accumulating and hold with patience. (Patience will be rewarded)

The majority of #Altcoins have already hit rock bottom and are about to escape.

In my opinion, August-September is going to be epic for Altcoins.🚀🚀#Crypto pic.twitter.com/cMdHagiaYc

— Captain Faibik (@CryptoFaibik) July 24, 2024

Accumulating and Holding Altcoins: The Path to Potential Profits

He stressed the need to accumulate altcoins and hold them patiently, as it will eventually pay off. According to him, the majority of altcoins have already bottomed out and are about to break it. He believes August and September will be epic months for altcoins.

In a chart posted by Captain Faibik, the overall crypto market cap, excluding Bitcoin and Ether, known as TOTAL3, is approaching the upper boundary of a descending channel pattern.

This context suggests a potential breakout and a significant rally towards the $1 trillion mark. Technically, the decline since mid-March is interpreted as a corrective trend for the value of TOTAL3, signaling a preparation to enter a rally structure.

Bitcoin’s influence and legislative developments suggest good prospects for the future

Furthermore, based on sentiment and technical patterns, Bitcoin, the world’s leading cryptocurrency, appears poised to lead the charge in the cryptocurrency market. Bitcoin’s performance often sets the tone for the market as a whole, and a strong move in BTC could trigger a significant rally in altcoins.

Previously, as we have already said reportedSenator Cynthia Lummis said she plans to introduce a bill at the upcoming Bitcoin conference that would require the Federal Reserve to hold Bitcoin as a reserve asset.

If this law passes, the US will treat BTC as a long-term investment rather than selling huge amounts infrequently, which could disrupt the market.

In addition, asset management firm VanEck has proposed a bold scenario in which Bitcoin Price Could Reach $2.9 Million Per BTC By 2050based on its fundamental outlook. Matthew Sigel, head of digital assets at VanEck, and senior investment analyst Patrick Bush noted that their estimate is based on Bitcoin’s adoption as a global medium of exchange and reserve asset.

As Bitcoin price increases, altcoins are expected to gain popularity, indicating the start of a bullish rally shortly after the BTC halving event.

Meanwhile, at the time of writing, the price of BTC was hovering around $67,007.99up 4.67% over the past 24 hours following a short-term correction.