The decline in altcoin prices can be attributed to multiple factors, forming a complex market phenomenon:
First, altcoins are often seen as high-risk speculative tools, especially MEME coins. Investors expect to make quick profits, and when prices stagnate or fall, panic selling may occur due to the high time cost of holding altcoins.
Second, although the staking mechanism looks attractive, it may actually hide risks. Some projects attract investors through staking and then profit through market manipulation, such as the experience of the RBN staking project.
Furthermore, the emergence of altcoins in the market has far exceeded the absorption capacity of investors. New projects have emerged in an endless stream, trying to attract investors to participate, but the market is saturated and it is difficult to support the valuation and liquidity of so many projects.
In addition, many altcoins adopt a low liquidity and high FDV model, coupled with a dense coin issuance rhythm, resulting in an oversupply in the market and a fierce competitive environment.
In general: the decline in the altcoin market is the result of multiple factors such as speculative nature, market psychology, staking risks, project promotion strategies, market saturation, and low liquidity and high valuation. When considering investing in altcoins, one should thoroughly research the market and project fundamentals, maintain a cautious investment strategy, and avoid blindly following trends or speculative behavior.