Altcoins

Market Veteran Unveils What’s Behind Recent Downturn as Altcoins Lose $137 Billion

Published

7 months ago

20 June, 2024

Here are five Altcoins under $1 that could shine this bull season

Renowned analyst Mike Deutscher has identified altcoin dispersion as a major factor behind the current downtrend, with the top 125 altcoins losing $137 billion in valuation.

The cryptocurrency market is currently experiencing a significant slowdown, with the value of Bitcoin plunging to $65,000. This decline had a profound effect on altcoins.

Notably, the data indicates that the market valuation of the top 125 altcoins (TOTAL2) fell by $137 billion, from $1.185 trillion on June 5 to $1.048 trillion. Amid this turmoil, Mike Deutscher, a veteran market analyst, provided an explanation for the causes of this downward spiral in a recent article on X.

Altcoin Dispersion a Major Factor Behind the Current Downtrend

According to Deutscher, a significant problem in the crypto market is the main reason for the underperformance of altcoins in the current market cycle. He identified this flaw as a concept dubbed “altcoin dispersion.”

A MAJOR fundamental flaw in cryptography is beginning to emerge.

This is the #1 reason why altcoins are underperforming this cycle.

And currently there seems to be no solution.

I just dug through all the data (what I found was shocking).

🧵: How altcoin dispersion is killing crypto.👇

– Miles Deutscher (@milesdeutscher) June 18, 2024

In his commentary, Deutscher reflected on the state of the market in 2021. During this period, the market thrived on an influx of new liquidity, primarily driven by retail investors. Bullish sentiment was at its peak and venture capitalist (Venture capital firms) have responded by investing unprecedented amounts in the crypto space.

Venture capitalists typically invest early in projects, often six months to two years before launch, at lower valuations. This investment helps fund project development, with these venture capital firms providing additional support services.

The first quarter of 2022 marked the highest quarter on record for venture capital funding, with $12 billion invested, coinciding with the start of the bear market. This influx of capital has led to a wave of new projects, leading to a three-fold increase in the total number of crypto tokens between 2021 and 2022.

However, the market soon faced a series of catastrophic events, starting with the collapse of LUNA and culminating in the fall of FTX. These events severely impacted the market, prompting projects that had previously raised funds to delay their launch.

Entering a bear market, characterized by low liquidity and poor confidence, was considered a recipe for failure. As a result, many projects have postponed their launch, awaiting more favorable conditions.

A flood of new Altcoins

By the fourth quarter of 2023, market conditions had improved, causing a wave of delayed project launches. This trend has continued through 2024, with an unprecedented number of new tokens entering the market.

German stress that over a million new crypto assets have been introduced since April, with half of them being meme pieces on Solana. Even excluding small meme coins, the number of new tokens is staggering. CoinMarketCap currently tracks over 2.4 million crypto assets.

The flood of new tokens has led to significant supply pressure on the market. This pressure “builds up” over time, with projects from previous years still unlocking their tokens.

An estimated $150 million to $200 million in additional supply pressure per day. This persistent selling pressure, similar to inflation, reduces the purchasing power of cryptocurrencies.

German disputed that the crypto market’s version of inflation, driven by altcoin dispersion, is exacerbating the current downturn. This is due to the high frequency of the launch of new crypto assets, as well as the decrease in new liquidity injected into the market.

Additionally, many new tokens have low fully diluted valuations (FDV) and high float mechanisms, contributing to market instability.

Proposed solution

To solve these problems, Deutscher suggested several measures. He demands Exchanges to ensure there is a better token distribution mechanism and for project teams to prioritize community allocations with larger pools for real users.

• Exchanges could impose better distribution of tokens
• Teams could prioritize community allocation and larger pools for authentic users.
• A higher percentage could be released at launch (possibly by implementing measures such as tiered sales taxes, etc. to deter dumping).

– Miles Deutscher (@milesdeutscher) June 18, 2024

He also recommended unlocking a higher percentage of tokens at launch, possibly implementing measures such as tiered sales taxes to discourage dumping.

Additionally, the analyst highlighted the need for a more retail investor-friendly market to encourage participation. He suggested that exchanges be more pragmatic, balancing new listings with delisting inactive projects to free up valuable liquidity.

Ultimately, a more inclusive market benefits all stakeholders, including exchanges, venture capital firms, and crypto projects.

Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinions of The Crypto Basic. Readers are encouraged to conduct thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.

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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

Disclaimer

Disclaimer: Blockchain.news provides content for informational purposes only. Under no circumstances shall blockchain.news be liable for any direct, indirect, incidental or consequential damages arising out of the use of, or inability to use, the information provided. This includes, but is not limited to, any loss or damage resulting from decisions made based on the content. Readers should conduct their own research and consult professionals before making any financial decisions.

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.