BNB, Cardano, Avalanche: The Reasons Behind The Decline Of These Major Cryptos...

Altcoin investors are in disarray. For the past few months, the secondary crypto markets like BNB, Cardano, and Avalanche have been in decline, with no clear prospect of recovery. For some analysts, this is a precursor to a deeper crisis. From concrete data to future implications, we will explore why this asset class seems to be teetering on its foundations.

Altcoins: A Worrying Dependence on Bitcoin

The survival and performance of altcoins appear closely linked to those of Bitcoin. Without a significant rise in the price of Bitcoin, a bull market for altcoins seems improbable. For example, BNB (Binance Coin) recently broke a major support, a level theoretically meant to trigger buying. However, the expected rebound did not materialize, exposing the fragility of this market once seen as supported by solid fundamentals. This dynamic is not limited to BNB but also includes other cryptos like Cardano and Avalanche.

Recent data illustrate a striking contrast between the popularity of certain altcoins and their actual market performance. Cardano, present for nearly seven years with a market capitalization of $12.5 billion, shows a Total Value Locked (TVL) in stablecoins of only $13 million, a sign of a lack of confidence and liquidity. The Avalanche crypto, once propelled by the 2021 GameFi hype, saw its market capitalization drop from $24 billion to $7 billion, while the liquidity of its stablecoins collapsed. These figures reveal a reality: despite their visibility and promises, many altcoins struggle to convince investors of their enduring value.

Weak Signals in the Crypto Market

Current technical analysis paints an equally worrisome picture for altcoins. A key indicator, the TradingView “Others” chart, which measures the market cap of cryptos outside the top 10, shows significant resistance at the levels of the 100-day and 200-day moving averages. If the market fails to break through these critical levels, another decline may occur. These resistances reflect a deep lack of confidence and the inability of altcoins to attract significant capital flows without a Bitcoin recovery.

Investor interest is increasingly turning towards projects with solid foundations and robust liquidity, sidelining altcoins that struggle to justify their value. The risk of prolonged stagnation is real: the continued decline in stablecoin liquidity on Avalanche is a striking example, illustrating a flight of capital to assets perceived as safer. For altcoins, the challenge is twofold: overcoming technical resistances and restoring investor confidence.

The current situation of altcoins highlights a structural fragility exacerbated by their dependence on Bitcoin and a lack of solid fundamentals. While technical data and market indicators point to difficult resistances to overcome, investor confidence remains shaky. The decline in liquidity, the collapse of market caps, and the poor performance of some flagship cryptos underscore a credibility crisis for this asset class. To hope for a recovery, altcoins will need to overcome technical barriers and restore lasting investor confidence by demonstrating their real value and utility in the long term. Without this, the risk of a prolonged decline remains ever-present.