The altcoin rally is not here yet!
The long-term trend for altcoins has been up since 2018, with support levels holding. However, given current market conditions, a significant rally, such as a 10x return, seems increasingly unlikely. The resistance facing altcoins, including key moving averages, suggests potential risks for those looking to invest in these assets.
Solana has shown resilience, with market cap recovering to its November 2021 highs. However, despite the recovery, SOL has yet to reach its early 2022 peak levels. The main concern is stagnant stablecoin liquidity, which has yet to reach its 2021 highs, reflecting limited inflows from new participants. The lack of significant new liquidity and the presence of speculative trading could hamper Solana’s ability to maintain its momentum.
Cardano faces significant challenges, with its market cap far higher than its underlying USD liquidity would suggest. The network’s total value locked (TVL) has declined from its late 2023 peak, highlighting a decline in activity and adoption. The current TVL is $13 million against a market cap of $12.5 billion, raising concerns about the platform’s ability to justify its high valuation in the event of a market downturn.
Avalanche has also underperformed, with its market cap dropping significantly from $24 billion in March 2024 to $7 billion. Despite the recent gains, the liquidity of the stablecoin remains flat and has failed to reach previous highs. This lack of liquidity and downward pressure suggests that Avalanche may have difficulty recovering to previous highs or sparking a new altcoin cycle.
Bitcoin Can Save Altcoins. Bitcoin is currently hovering around a $1.4 trillion market cap and facing resistance. Bitcoin must break out and sustain above $72,000 to spark a strong altcoin cycle.
Failure to sustain this level or a drop to the 200-week moving average could have a significant impact on altcoins, potentially causing Bitcoin’s price to fall to $125 billion or even as low as $120-130 billion. In short, Bitcoin's strength could mean huge gains for altcoins - if it surges, then they could surge too!
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