Altcoins
Why are Altcoins crashing? Here are the main reasons
What appeared to be a promising week for crypto turned sour when Bitcoin (BTC) plummeted to its lowest price in four weeks, falling more than 2% to $65,100 during the US trading session. -United, compared to approximately $67,000. Over the past seven days, BTC has seen a 7.5% decline. When Bitcoin prices fall, other cryptocurrencies, called altcoins, often follow.
Analyzing the catastrophic event, Crypto analyst Michaël van de Poppe, known as “Crypto Michaël,” said analysis the altcoin price collapse and provided a glimpse into the future of the cryptocurrency market. He noted that major altcoins are down more than 40% over the past two weeks, and on-chain altcoins are down more than 70%. He also highlighted the impact of Bitcoin’s dominance on altcoins, predicting that a reversal of Bitcoin’s dominance could signal a new altcoin rally.
Many in the crypto space are wondering why altcoins are crashing so significantly.
We have some answers for you.
Uncertainty Surrounding Spot Ethereum ETFs
One of the main reasons for the current crash, according to Michaël, is the uncertainty surrounding Ethereum spot ETFs in the United States. Although approved by the SEC, these ETFs are not yet listed, causing confusion and affecting market sentiment. Michaël explained the two-part approval process involving Forms 19b-4 (covering technical details and SEC compliance) and Forms S1 (related to stock listing). The delay in listing contributed to downward pressure on the market.
Michaël believes that once Ethereum spot ETFs are listed, Ethereum could be classified as a commodity similar to Bitcoin. This classification could attract increased institutional investment and greater acceptance of Ethereum and other cryptocurrencies.
Macroeconomic factors and market impact
Michaël noted that lower-than-expected U.S. inflation initially suggested a potential halt to Fed rate hikes, but that the Fed’s hawkish stance is fueling uncertainty. Altcoins thrive in environments of low interest rates and high liquidity, which are currently lacking. A strong dollar, supported by recent ECB rate cuts, is also putting pressure on the crypto market.
Is a reversal planned?
Despite the current negative sentiment, signs of a potential rebound are emerging. Michaël is optimistic about a market turnaround in the next 1 to 2 weeks. It also highlights the importance of Bitcoin’s dominance over altcoins, as altcoins are underperforming due to their high dominance. A reversal in Bitcoin dominance could signal a new altcoin rally.
Key support levels
Michaël highlighted key support levels for Ethereum versus Bitcoin, emphasizing their importance for a potential reversal. However, he also noted that macroeconomic indicators such as dollar strength and US Treasury yields affect market movements.
Only time will tell if the altcoin market rebounds or if it is a sign of a bigger change. Stay tuned for further updates!