Prospects for Altcoin Recovery
Altcoins have borne the brunt of the recent decline in the crypto market. Bitcoin accounted for less than half of the $1 billion in forced closures and its market share rose by 1% to 57% over the week.
Since the beginning of the year, Bitcoin has still managed a 34% gain, outperforming the US stock market, where the S&P 500 has risen by 10.2%.
However, most of the top 50 altcoins have lost nearly all their gains from 2024. Analysts from CryptoQuant have published a ranking of the largest altcoins showing the worst performance:
During periods of uncertainty and potential recession in the US economy, it is natural to see a sell-off in altcoins and a rise in Bitcoin’s dominance. Yet, this time, the reaction seems excessive, especially as the Federal Reserve retains its influence and plans to reverse monetary policy and “save the economy” as early as September.
Regulatory easing in the autumn will increase market liquidity, potentially triggering the start of an altcoin season.
Ethereum-ETF investors appear to agree, as they have been buying back during the downturn for two consecutive days. On Monday and Tuesday combined, net inflows totalled $147 million, the best result since the ETF’s launch.
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