Crypto Market Faces Strong Sell-Off: What’s Next?
Bitcoin and most altcoins are experiencing a significant sell-off. The Altcoin Season Index has dropped from 80 to 41, indicating a shift in market sentiment.
Bitcoin briefly dipped below $104,000, while altcoins like Ethereum and Ripple are in a bear market. The total market cap of cryptocurrencies, excluding Bitcoin and stablecoins, has fallen from $1.5 trillion to $1.1 trillion.
This crash is due to rising liquidations and panic selling.the Fear and Greed index has moved to the fear zone. Trade tensions between the US and China have also contributed to the decline.
Will the crypto market recover? There are reasons to believe it will. The Altcoin Season Index usually triggers a rebound when it falls below 25. With the index at 41, a further drop could lead to a bounce back this quarter.
Other potential catalysts include the end of the government shutdown, which could lead to the approval of altcoin ETFs.Strong earnings from American companies could also boost the market.
Historically, bitcoin and altcoins have recovered after steep declines. As a notable example, altcoins fell by 57% between November last year and April but then bounced back. The Federal Reserve’s rate cuts could also support the crypto market.
While the current situation is challenging, there are signs of hope for a recovery in the coming weeks or months.
