Crypto: Altcoins Won't Reach Their Peaks For Months

The crypto market is going through a period of turbulence, and altcoins seem far from regaining their December peaks. According to analyst Matthew Hyland, we will likely have to wait until April, or even longer, to witness a full recovery.

A pressured crypto market: liquidations and uncertainties

On February 3rd, the crypto market experienced one of the largest liquidation events in its history.

Over $2.24 billion was liquidated in 24 hours. This plunged altcoins into a downward spiral.

Ben Zhou, CEO of Bybit, even believes the actual figure could reach $8 to $10 billion. These massive liquidations were triggered by the threats of tariffs from former U.S. President Donald Trump, creating an atmosphere of uncertainty and panic.

Bitcoin, often seen as a safe haven in times of crisis, was not spared. On February 3rd, it fell below the psychological barrier of $100,000, dropping to $92,584, its lowest level since late January.

Although it briefly rebounded, its price remains volatile, reflecting the nerves of crypto investors. This drop has also affected altcoins, which are struggling to recover.

Matthew Hyland points out that these events are reminiscent of past crises, such as the one in 2020, when the market took several months to recover. The COVID-19 pandemic had caused a 47% drop in Bitcoin in one day, followed by a gradual recovery over several months. A similar scenario seems to be shaping up today.

Lessons from the past: patience and caution

Previous cycles of the crypto market offer valuable insights for understanding the current situation.

In 2020, after the initial shock of the pandemic, the flagship crypto took five months to reach a stable level, finally surpassing $11,000 in August. Similarly, in 2022, the collapse of Terra and the bankruptcy of FTX led to lasting disruptions, requiring months of consolidation before a return to normal.

Hyland emphasizes that a quick recovery is unlikely. “Even a V-shaped recovery, like that of 2020, took weeks with numerous dips before rising,” he explains.

This perspective urges investors to adopt a patient and measured approach. Altcoins, often more volatile than Bitcoin, could take even more time to reach their peaks again.

However, this period of consolidation is not necessarily bad news. It allows the crypto market to shed excesses and lay the groundwork for more sustainable growth. For savvy investors, it is also an opportunity to accumulate assets at attractive prices, in view of a future rebound. Is Dogecoin part of it? These data are hopeful.