Altcoins are suffering. When they will recover?
As bitcoin hovers near a consolidative state, roughly 10% shy of its peak value, alternative cryptocurrencies (altcoins) are experiencing a stark downturn, erasing the majority of progress achieved during the crypto surge in March.
The enthusiasm for an altseason is waning, with both the crypto market at large and social mood hitting low points.
Underlying Causes of the Altcoin Slump
Traditionally, Ethereum spearheads the movement in altcoin markets, and since the close of May, it's observed a 10% drop. The ambiguity surrounding Ethereum exchange-traded funds (ETFs), approved yet still not listed, adds to the uncertainty.
The impending launch of spot ETH ETFs, with Bloomberg analysts hinting at a July 2 date, could significantly energize altcoins by categorizing ETH as a commodity, not a security.
Another drag on the altcoin sphere is the state of U.S. economic indicators and ongoing high inflation, which hampers the Federal Reserve's ability to cut rates.
Experts claimed that altcoins thrive during times of quantitative easing and low-interest scenarios, where global economy liquidity is on the rise.
This trend was evident in past cycles, witnessing altcoins' success amidst low borrowing costs and reduced rates.
Bitcoin's Dominance Prevails
Bitcoin's dominance is currently a major component. With BTC dominance standing tall at 55.4% and showing growth since December, as per Tradingview data.
"Given that the Ethereum ETF is going to be listed in the upcoming weeks, it seems very likely that the rotation will happen and that this level of Bitcoin dominance won’t stay," he stated.
On June 15, via a post on X, crypto trader ‘cyclop’ noted that in previous cycles, altcoins hit their zenith exactly 546 days following the halving event.
The total market capitalization has leveled off over the weekend at $2.54 trillion, as per CoinGecko. While Bitcoin maintains its trading range, the majority of altcoins are on a downward trajectory.
