Crypto: Altcoins in free fall, heightened dependence on bitcoin!

Altcoins struggle to regain their highs as the crypto market shows no worrisome signs. According to Nansen’s lead analyst, as long as Bitcoin does not break out of its current range, the situation for altcoins will remain unchanged. As such, the start of the summer could be more gloomy than ever for crypto traders.

The Altcoins in Search of Their Bottom

The altcoin season, or altseason, seems currently hampered by the price evolution of Bitcoin, as this asset is the most influential on the entire crypto market.

Bitcoin struggling, altcoins are holding their breath. According to Cointelegraph, some analysts believe that the crypto market is ready to hit the bottom, possibly signaling the start of a new bullish cycle for altcoins.

The downturn of the altcoin market is accelerating. Rekt Capital, a renowned analyst, predicts a likely arrival at the lowest point within 3 weeks. “Altcoins are perfectly following the plan,” he states, underlining that these assets had already hit their lowest level last February, coinciding with Bitcoin’s halving.

Last month, the market capitalization of altcoins, excluding the top 10 cryptocurrencies, suffered a drop of more than 21%, reaching $265 billion. Although this is a significant decline, the market cap of altcoins is still up more than 24% since the start of the year and more than 167% year-over-year.

The trend of the altcoin market remains strongly linked to the evolution of Bitcoin, which is stagnating around $63,126. Alex Onufriychuk, blockchain advisor, believes that altcoins could hit their bottom in June, due to the lack of new liquidity from Bitcoin ETFs in the United States and Hong Kong.

The Wait for the Bitcoin Shake-Up!

According to Aurelie Barthere, analyst at Nansen, a new bullish cycle for altcoins will primarily depend on a surge in Bitcoin to unprecedented highs. Altcoins, these highly volatile digital currencies, shine especially when optimism prevails. However, since mid-March, the crypto market has displayed a less euphoric sentiment.

While the BTC price is maintaining around the 20-day exponential moving average, altcoins are experiencing heightened volatility. A breakthrough above this average and a clear resurgence of the crypto star’s ascent are necessary for altcoins to take the lead again.

Even though analysts predict a healthy period of consolidation since the halving of BTC miner rewards, it’s clear that a significant Bitcoin movement will trigger a new dynamic for alternative cryptos.

For Alex Onufriychuk from Qubic Labs, a drop in altcoins in June will not be enough to trigger a bullish cycle. There will need to be more investments, both private and institutional, as well as a favorable regulatory context.

Despite promising buy signals on the monthly chart, and the US M2 money supply turning positive again since November 2023, altcoins remain dependent on a strong Bitcoin to start a new bullish cycle.