Altcoins
Here’s when the best coins will return from the ‘danger zone’ and explode
Popular Cryptocurrency Analyst Michael Van De Poppe recently watched his latest video and discussed the current state and future of the cryptocurrency market, focusing on altcoins. He said the altcoin market is very volatile, capable of sharp increases as well as major corrections, as seen recently. Major altcoins have fallen more than 40% over the past two weeks, with some on-chain altcoins falling more than 70%.
This volatility raises questions about the future of altcoins or whether the downtrend will continue. There are several factors to consider regarding the current correction.
Impact of Ethereum ETF Delay
Poppe gave two reasons to explain the scenario. First, he said that Altcoins, like Ethereum, are struggling due to uncertainty over when the Ethereum ETF will begin trading. Even though the ETF has been approved, it has not yet been listed. This delay causes confusion and market instability.
The approval process involves detailed filings to ensure compliance with regulations, but actual negotiations have not yet begun, leading to continued market corrections. Once the ETF begins trading, it could attract more investor interest and potentially lead to a market rally, similar to what happened with previous ETFs.
Macroeconomic factors
The second argument revolves around recent macroeconomic events such as the CPI (consumer price index), PPI (producer price index) and FOMC (Federal Open Market Committee) announcements. These events strongly influence market sentiment and policy decisions, particularly regarding interest rates. CPI and PPI data came in below expectations, suggesting a potential easing of inflationary pressures and potentially signaling future rate cuts from the Federal Reserve (Fed).
Altcoins generally perform well during periods of quantitative easing (QE) and low interest rates when global liquidity increases. However, recent market trends, including a stronger dollar and reduced expectations for rate cuts, have negatively impacted cryptocurrencies, which are considered risky assets.
Anticipate the market turnaround
He expects a reversal in crypto markets and expects the current downturn to end soon. The main catalyst for this turnaround is the potential listing of the Ethereum ETF, which is likely to generate significant market interest and confidence.
Currently, Bitcoin is doing well, but Ethereum and many other altcoins are still well below their all-time high prices. He says to watch Bitcoin’s dominance and how Ethereum’s price compares to Bitcoin, as these factors could indicate whether altcoins will start to do better.