Markets
Three reasons why Altcoins are suffering and when they will recover
While bitcoin remains in consolidation, about 10% off its all-time high, altcoins are collapsing and erasing most of the gains made in March’s cryptocurrency market rally.
Requires high season have declined and the overall cryptocurrency market and social sentiment are low.
There are a few factors contributing to this bearish trend in altcoins, as highlighted by market analyst and MN Trading founder Michaël van de Poppe on June 15.
Reasons why Altcoins are declining
Ethereum typically leads altcoin markets and has fallen 10% since the end of May. There is currently a lot of uncertainty about Ethereum Exchange Traded Funds as they have been approved but have not yet been listed for trading.
If spot ETH ETFs launch soon, Bloomberg analysts have watched on July 2 – This could provide a big boost to altcoins as ETH will be considered a commodity rather than a security.
“A lot of things will happen in the Ethereum ecosystem,” the analyst said, adding that almost all cryptocurrencies could be considered commodities.
Another factor weighing on the altcoin markets is the United States economic data and persistently high inflation, which prevents the Federal Reserve from cutting rates.
“Altcoins flourish best during periods of quantitative easing and low interest rates,” when liquidity in the global economy increases, he said. She said.
This has been seen during previous cycles as altcoins perform well when money is cheap to borrow and rates are low.
High BTC dominance
The decline will not continue, he added, noting that Bitcoin’s dominance is also an important factor. BTC dominance is currently high at 55.4% and has been increasing since December, second at Tradingview.
“Given that the Ethereum ETF will list in the coming weeks, it seems very likely that rotation will occur and that this level of Bitcoin dominance will not last.”
In a post on X on June 15, cryptocurrency trader “cyclop” She said that altcoins peaked exactly 546 days after the halving in the last two cycles before adding,
“If the cycle repeats, this is your last chance to buy on the dip before alts go parabolic.”
According to CoinGecko, the total market capitalization remained unchanged over the weekend at $2.54 trillion. Bitcoin remains within its bounded channel, but most altcoins continue to decline.