WHY ALTSCOINS ARE GOING DOWN đ ?
What seemed like a promising week for crypto turned sour as Bitcoin (BTC) dropped to its lowest price in four weeks, falling over 2% to $65,100 during the U.S. trading session from around $67,000. Over the past seven days, BTC has seen a 7.5% decline. When Bitcoin prices drop, other cryptocurrencies, known as altcoins, often follow.Â
Analyzing the catastrophic event, Crypto analyst MichaĂ«l van de Poppe, known as âCrypto MichaĂ«l,â has analyzed the crash in altcoin prices and provided insights into the cryptocurrency marketâs future. He noted that major altcoins have dropped by over 40% in the past two weeks, with on-chain altcoins plummeting by over 70%. He also highlighted the impact of Bitcoin dominance on altcoins, predicting a reversal in Bitcoin dominance could signal a new altcoin rally.
Many in the crypto sphere are questioning why altcoins are crashing so significantly.
Weâve got some answers for you.
Uncertainty Surrounding Spot Ethereum ETFs
One of the primary reasons for the current crash, according to Michaël, is the uncertainty surrounding spot Ethereum ETFs in the U.S. Although approved by the SEC, these ETFs are not yet listed, causing confusion and affecting market sentiment. Michaël explained the two-part approval process involving 19b-4 forms (covering technical details and SEC compliance) and S1 forms (related to listing on exchanges). The delay in listing has contributed to downward pressure on the market.
Michaël believes that once spot Ethereum ETFs are listed, Ethereum could be classified as a commodity similar to Bitcoin. This classification could attract increased institutional investment and wider acceptance of Ethereum and other cryptocurrencies.
Macroeconomic Factors and Market Impact
MichaĂ«l noted that lower-than-expected U.S. inflation initially suggested a potential halt in Fed rate hikes, but the Fedâs hawkish stance maintains uncertainty. Altcoins thrive in low interest rates, and high liquidity environments.