Altcoin
What are the reasons behind the bleeding in the cryptocurrency market and when it might stop: Michaël van de Poppe
In a video released today, crypto analyst Michaël van de Poppe, also known as “Crypto Michaël,” delved into the reasons for the ongoing collapse in altcoin prices and offered insights into the future of the cryptocurrency market.
Michaël began by acknowledging the significant downturn in the altcoin market, with some major altcoins down over 40% in the last two weeks and on-chain altcoins plummeting over 70%. He highlighted the inherent volatility of altcoins, which can experience rapid gains followed by severe corrections.
One of the main reasons for the current collapse, according to Michaël, is the uncertainty surrounding spot Ethereum ETFs in the US. Michaël pointed out that although these ETFs have been approved by the US SEC, they are not yet listed, creating confusion and influencing the market. feeling. He explained the two-part approval process involving Forms 19b-4 (which covers technical details and compliance with the SEC) and Forms S1 (which involves the actual exchanges that list the ETFs). The delay in listing contributed to the downward pressure on the market.
Michaël noted that the approval of Ethereum spot ETFs would likely classify Ethereum as a commodity, similar to Bitcoin. He believes this classification could lead to increased institutional investment and broader acceptance of Ethereum and other cryptocurrencies.
Michaël then moved on to talk about another significant factor influencing the market, which is recent macroeconomic data, including the US Consumer Price Index (CPI) and the US Producer Price Index (PPI). Both indicators showed lower-than-expected inflation, which initially suggested a potential end to rate hikes by the Federal Reserve. However, the Fed’s more aggressive stance has led to continued uncertainty. Michaël highlighted that altcoins perform best in environments with low interest rates and high liquidity, conditions which are currently not met.
The strength of the US dollar and its impact on the cryptocurrency market was also discussed. A strong dollar typically leads to weaker performance in risky assets like cryptocurrencies. Michaël added that recent decisions by the European Central Bank (ECB) to cut rates have further strengthened the dollar, increasing pressure on the cryptocurrency market.
Despite the current recession, Michaël remains optimistic about the potential for a market turnaround. He believes the US listing of Ethereum spot ETFs, expected within the next few months, could serve as a significant catalyst for an uptrend. He said historical patterns, such as price action following the approval of the Bitcoin ETF, suggest that initial corrections could be followed by substantial gains.
Michaël also highlighted the importance of Bitcoin’s dominance and its impact on altcoins. As Bitcoin’s dominance remains high, altcoins are underperforming. However, he predicts that a reversal of Bitcoin’s dominance could signal the start of a new altcoin rally.
In his technical analysis, Michaël pointed out several critical support levels for Ethereum versus Bitcoin and highlighted the importance of these levels holding to trigger a potential reversal. He also discussed the importance of macroeconomic indicators such as the strength of the dollar and US Treasury yields, which influence market movements.
Featured image via Pixabay