While the cryptocurrency market contends with a broader downturn, altcoins have encountered notable difficulties, with Ethereum (ETH) at the forefront, suffering losses close to 20%.
This decline follows Ethereum’s repeated setbacks in breaking through the vital resistance level of $4,000, a challenge that has proved daunting in recent months, obstructing the cryptocurrency from reaching new peak levels, akin to Bitcoin (BTC) as it wrapped up 2024.
Mid-Cycle Adjustment For Altcoins: A Route To Revival?
Market analyst Ash Crypto has recently shared perspectives in a social media update on X (formerly Twitter) about the present situation of altcoins, indicating they are undergoing a “mid-cycle adjustment.”
According to Ash Crypto, this phase is a typical element of the bull market cycle and could pave the way for recuperation of previously lost value and potentially even greater profits for these digital currencies.
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In his social media update, the analyst pointed out historical examples, mentioning that similar price movements occurred in January 2021, right before the emergence of an altcoin season that captivated traders.
Despite the recent variations, Ethereum and other altcoins have exhibited slight signs of resurgence, with ETH managing to rise above $3,200, bouncing back from its nearest support level of $3,100.
This recent increase staved off further declines and ignited optimism among traders. However, Ash Crypto warns that an additional drop may be imminent before a more sustained recovery can take place.
Market Whales Might Force Retail Investors Out
In his evaluation, Ash Crypto projected that altcoins might face one final market adjustment before what he anticipates will be a full bull mode later this year.
The analyst referred to a chart he provided, illustrating the total market capitalization of altcoins excluding Bitcoin and Ethereum, which indicated potential consolidation between the $926 billion and $930 billion bounds.
This consolidation phase could precede a shift towards a bullish cycle peak, estimated to soar as high as $3.39 trillion.
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Adding to the complexity, Ash Crypto stated that Bitcoin’s dominance seems to have peaked, indicating that an altcoin season is on the verge of starting. However, he cautions that prior to this potential upswing, market whales might seek to eliminate retail investors by manipulating prices.
At the moment of writing, ETH is trading at $3,215, having risen over 3% within the past 24 hours. Other altcoins such as XRP, Solana (SOL) and Cardano (ADA) have also increased by 5%, 3%, and 5.3% respectively during the same period.
Considering Ash Crypto’s assessment, it remains uncertain whether additional consolidation or another adjustment for altcoins will occur before what could be the most remarkable gains for these digital assets in their history.
Imagen destacada de DALL-E, gráfico de TradingView.com
