Reasons for the decline in altcoin prices

The decline in altcoin prices can be attributed to a variety of factors, constituting a complex market phenomenon:

First, altcoins are often seen as high-risk speculative tools, especially MEME coins. Market participants expect to make quick profits, and when prices stagnate, panic selling may occur because investors feel that holding altcoins is a waste of time.

Second, although the staking mechanism in the market looks attractive on the surface, it may actually hide risks. Some projects attract investors through staking and then profit through market manipulation, such as the experience of RBN staking investors.

In addition, the emergence of altcoins in the market is much faster than the absorption capacity of investors. Each new project tries to attract investors to participate, but the market is saturated and it is difficult to support the valuation and liquidity of so many new projects.

Furthermore, some altcoins adopt a low liquidity and high FDV (Fully Diluted Valuation) model, coupled with a dense coin issuance rhythm, resulting in an oversupply in the market, making it difficult to maintain prices in a highly competitive environment.

In general, the decline of the altcoin market is the result of multiple factors, including speculative nature, market psychology, pledge risk, project promotion strategy, market saturation, low liquidity and high valuation. When considering investing in altcoins, one should conduct in-depth research on the market and project fundamentals, maintain a cautious investment strategy, and avoid blindly following the trend or speculative behavior.