The crypto market is in a consolidation phase after a strong rally from October to March. While this is manageable for Bitcoin and Ethereum investors, those holding smaller altcoins are feeling the pinch. The sentiment in crypto communities has turned negative, with many altcoins seeing substantial drops.
Read on to get the actual pulse of the Altcoin market!
Major Altcoins Take a Hit: What You Need to Know
Bitcoin and Ethereum have managed to stay only 15% below their yearly highs. In contrast, major altcoins like Solana and Avalanche have plummeted 40% to 50% from their March peaks. Even worse, layer-1 tokens like SUI and Aptos have crashed by 60% to 70%. As per experts’ view, this sharp decline is due to factors like token unlocks, venture capital sell-offs, and a lack of new money flowing into the market.
Token Unlocks and Selling Pressure: The Double Whammy for Altcoins
Many altcoins are suffering from a constantly increasing supply of tokens due to scheduled unlocks. For example, Solana’s supply grows by 74,0000 tokens each day, worth about $10 million at current prices. According to experts, this increase in supply, combined with venture capital funds cashing out their early investments, is driving prices down.
Crypto Liquidity Inflows Stagnate: What It Means for the Altcoin Market
Liquidity inflows into the crypto market have stalled. This is evident from the stablecoin market cap, which has remained flat since April after a $30 billion increase earlier this year. The combined market cap of the top four stablecoins (USDT, USDC, FDUSD, and DAI) shows reduced trading activity and crypto investor interest.
Altcoins Seasonal Trends and Market Cap Drops: An Overview
As per the chart showing the aggregated market cap of crypto assets excluding BTC and ETH, June is historically a tough month for altcoins, and this year is no different. As of June 22, 2024, the aggregated market cap is $594.967 billion, down 14.30% over the past month. This is a significant drop from a peak of $706.676 billion earlier in June and a yearly high of $775.36 billion on March 31.
In conclusion, as the crypto market consolidates, smaller altcoins are facing severe challenges.
Stay tuned to Coinpedia for more updates on the altcoin market!
