Here's why altcoin investors are struggling despite Bitcoin and Ether near yearly highs

Constant dilution of supply with token unlocks, selling pressure from venture funds, lack of new entries into cryptocurrencies, and seasonal trends contributed to the brutal drop in altcoin prices.

The cryptocurrency market is undergoing healthy consolidation after a huge surge from October to March, at least for those invested in the two largest digital assets.

However, for those who own smaller cryptocurrencies, this is a brutal correction, with sentiment in crypto social media circles resembling bear market desperation.

While Bitcoin (BTC) and Ethereum's Ether (ETH) are only 15% below their yearly highs, several major cryptocurrencies such as Solana (SOL) and Avalanche (AVAX) are down 40-50% from their peaks. March peaks, while layer 1 sui (SUI) and apt (APT) rivals have 60% to 70% craters.

For example, the Ethereum Layer 2 network's Arbitrum (ARB) token is approaching its all-time lowest price since last September, even though its market cap has risen from $1 billion to $2.5 billion. million dollars due to a massive increase in its supply.

Another example is Solana, whose supply is inflating by 75,000 tokens each day, worth about $10 million at current prices.

“Unlike stocks that have constant passive supply from ETF inflows and bond buybacks, cryptocurrencies, and particularly altcoins, have the opposite: a constant flow of selling pressure,” Quinn noted in an X Thomson, founder of cryptocurrency hedge fund Lekker Capital. mail.

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