Altcoins

This is why Altcoin investors are struggling despite Bitcoin and Ether near yearly highs

Published

10 months ago

25 June, 2024

This is why Altcoin investors are struggling despite Bitcoin and Ether near yearly highs

Crypto majors such as SOL, AVAX, APT, SUI have seen corrections of 40-70% over the past few months, weighing on altcoin sentiment, while BTC and ETH are down only 15%. % compared to their annual peaks.
Venture capital funds are under pressure to sell tokens to make a profit on their investments made over the past few years, noted Markus Thielen.
The lack of capital inflow into crypto markets “has particularly harmful implications for tokens with large upcoming unlocks as well as new [tokens] and airdrop programs,” said Anagram partner David Shuttleworth.

The cryptocurrency market is seeing a healthy consolidation after a massive rise from October to March – at least for those invested in the two largest digital assets.

However, for those holding smaller cryptocurrencies, this is a sharp correction, with the sentiment in crypto social media circles resembling the despair of a bear market.

While bitcoin {{BTC}} and Ethereum ether {{ETH}} are only 15% below their yearly highs, several crypto majors like solana {{SOL}} and avalanche {{AVAX) }} are down 40% to 50% from their March peak, while layer 1 challengers sui {{SUI}} and aptos {{APT}} are up 60% to 70%.

Good advice for very long term investors, but I run both trading and venture books

I believe the cycle is over for 99% of alts,

Keep what makes sense for multi-year/decade investments

– Andrew Kang (@Rewkang) June 21, 2024

Selling pressure from venture funds with the widening supply of unlocked tokens, lack of new flows into crypto, and seasonal trends have all contributed to weakness in altcoins, a term used to describe cryptocurrencies beyond the larger ones like bitcoin and ether.

High dilution

Many altcoins are experiencing a constantly diluting token supply via unlocks and distributions scheduled for years to come. Indeed, most tokens are locked, purchased by early investors or intended for ecosystem development and grants.

For example, the Ethereum layer 2 network Arbitrum token {{ARB}} is approaching its all-time low price from last September, even though its market capitalization has increased from $1 billion to $2.5 billion. dollars due to a massive increase in its supply.

Another example is Solana, whose supply increases every day by 75,000 tokens, worth around $10 million at current prices.

“Unlike stocks that experience constant passive supply from ETF inflows and bond buybacks, crypto, and especially altcoins, have the opposite: a constant flow of selling pressure,” Quinn Thomson, founder of crypto hedge fund Lekker Capital, note in an X post.

The story continues

A significant portion of the selling pressure comes from venture capital funds making profits on their first investments in projects launched in recent years.

“Venture funds invested $13 billion in the first quarter of 2022 as the market transitioned into a sharply bear market,” Markus Thielen, founder of 10x Research, said in a report earlier this week. “These funds are now under pressure from their investors to return their capital as artificial intelligence (AI) has become a hotter topic.”

When market appetite for smaller, more speculative crypto assets wanes and trading volumes decline – as in recent months – there is not enough demand to absorb this supply shock.

Learn more: Crypto Markets Under Pressure as $2 Billion Altcoin Tokens Unlocked and $11 Billion Bitcoin Distribution Loom

Lack of new influxes

Liquidity inflows into cryptocurrency markets have also stagnated or even reversed in recent weeks, as shown by the market value of stablecoins, which are primarily used as an intermediary for cryptocurrency trading.

The combined market capitalization of the four largest stablecoins – Tether’s USDT, Circle’s USDC, First Digital’s FDUSD and Maker’s DAI – has been stable since April after a $30 billion expansion earlier this year , according to TradingView data.

Combined market capitalization of USDT, USDC, FDUSD and DAI (TradingView)

Stablecoin balances on exchanges – which translates into dry powder for traders and investors – fell by $4 billion to their lowest level since February, David Shuttleworth, partner at Anagram, pointed out in a statement. Message citing Nansen’s data.

“This has particularly harmful implications for tokens with large upcoming unlocks as well as new [tokens] and parachute programs,” Shuttleworth said.

Recently launched tokens of blockchain bridge Wormhole (W), synthetic yield dollar protocol Ethena (ENA), and layer 2 network Starknet {{STRK}} have all fallen approximately 60% to 70% from their respective summits and will face billions. dollars of tokens distributed in the years to come.

Seasonal trends have also been bearish for smaller tokens, with June typically being a down month for altcoins.

TradingView data shows that the aggregate market cap of crypto assets excluding BTC and ETH, captured by TOTAL.3 metric, has seen a decline every June for the past six years.

This month is poised to be no exception, with TOTAL.3 down 11% year to date.

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Altcoins

Long-Term Impact of Ethereum ETF on Cryptocurrency Market

Published

9 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.

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Altcoins

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

Published

9 months ago

28 July, 2024

CoinFlix Staff

IntoTheBlock Releases Report on Institutional DeFi Trilemma

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Altcoins

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

Published

9 months ago

28 July, 2024

CoinFlix Staff

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Altcoins

Epic Altcoin Rally Expected for August and September

Published

9 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.