Altcoins are currently undergoing a substantial decline in the cryptocurrency market, while Bitcoin is maintaining a reasonably steady position.
Although Bitcoin is currently trading below $66K, altcoins have experienced significant declines, completely eliminating the profits gained during the March rise.
The prevailing market sentiment is pessimistic, as the demand for an upcoming cryptocurrency season is diminishing. The bearish trend can be attributed to two main factors: a 5% decline in Ethereum’s value over the past week and the postponement of listing Ethereum exchange-traded funds (ETFs).
This delay has caused confusion and worsened market instability. Bloomberg analysts predict that the debut of these ETFs on July 2 could potentially result in an increase, potentially leading to the reclassification of Ethereum as a commodity instead of a security.
The Federal Reserve is unable to lower interest rates due to macroeconomic variables such as elevated inflation and unfavorable U.S. economic data.
Altcoins tend to exhibit strong performance during periods characterized by quantitative easing and low interest rates, when there is a surplus of global liquidity.
The prevailing conditions of elevated interest rates and constrained availability of funds have a negative effect on assets that are associated with higher risk, such as cryptocurrencies.
The present market dominance of Bitcoin, which stands at 55.4%, highlights the increasing pressure on alternative cryptocurrencies.
There is speculation among analysts that the impending introduction of the Ethereum ETF could cause a reversal in this trend, resulting in heightened investor attention towards alternative cryptocurrencies.
