As the cryptocurrency market grapples with a broader decline, altcoins have faced significant challenges, with Ethereum (ETH) leading the way with losses nearing 20%.
This drop comes after Ethereum’s repeated failures to break through the crucial resistance level of $4,000, a barrier that has proven formidable in recent months also preventing the cryptocurrency to reach new record levels as Bitcoin (BTC) did to close 2024.
Mid-Cycle Correction For Altcoins: A Path To Recovery?
Market expert Ash Crypto has recently offered insights in a social media post on X (formerly Twitter), into the current state of altcoins, suggesting that they are undergoing a “mid-cycle correction.”
According to Ash Crypto, this phase is a natural part of the bull market cycle and may set the stage for a recovery of previously lost value and potentially even higher gains for these digital assets.
In his social media post, the expert highlighted historical precedents, noting that similar price actions were seen in January 2021, just before the onset of an altcoin season that captivated investors.
Despite recent fluctuations, Ethereum and other altcoins have shown slight signs of recovery, with ETH managing to surge above $3,200, rebounding from its nearest support level of $3,100.
This recent uptick prevented further losses and sparked hope among traders. However, Ash Crypto cautions that another dip may be on the horizon before a more sustained recovery can take hold.
Market Whales May Shake Out Retail Investors
In his analysis, Ash Crypto projected that altcoins could experience one final market correction before entering what he believes will be a full bull mode later this year.
The expert referenced a chart he shared, depicting the total market capitalization of altcoins excluding Bitcoin and Ethereum, which showed potential consolidation between the $926 billion and $930 billion levels.
This consolidation phase could precede a move towards a bullish cycle peak, estimated to reach as high as $3.39 trillion.
Adding to the intrigue, Ash Crypto remarked that Bitcoin’s dominance appears to have topped out, suggesting that an altcoin season is imminent. However, he warns that before this potential surge, market whales may attempt to shake out retail investors by manipulating prices.
At the time of writing, ETH is trading at $3,215, up over 3% in the 24-hour time frame. Other altcoins such as XRP, Solana (SOL) and Cardano (ADA) have also risen by 5%, 3% and 5.3% respectively in the same time frame.
Taking into account Ash Crypto’s analysis, it remains to be seen whether further consolidation or another correction will take place for altcoins before what could be the most notable gains for these digital assets in history.
Featured image from DALL-E, chart from TradingView.com
Source: NewsBTC