The once-sizzling altcoin market is facing a harsh reality check. Prices have plummeted a staggering 40-90% in recent months, mirroring past crashes but with a glacial pace that’s leaving investors numb. Renowned crypto analyst Daan Crypto sees this as a necessary correction, albeit a slow and potentially painful one.
Echoes Of Crashes Past, But With A Muted Roar
Seasoned crypto veterans might be experiencing a sense of deja vu. The scene: altcoin prices in freefall, portfolios hemorrhaging value. The twist? This bear market, while no less brutal in its outcome, lacks the ferocious speed of its predecessors. Unlike the gut-wrenching plunges witnessed during the 2020 pandemic crash, the current decline is a slow burn, dragging on for months.
While the current situation might seem bleak, there’s a crucial distinction from past crashes, explains Daan Crypto. The drops are significant, but they’re happening at a slower pace. This could indicate a more drawn-out correction phase for the market.
At this point alts have come down about 40-90%.
Although it wasn’t as violent as during the covid crash, the end result has been roughly the same for many coins.We’re just doing everything slower this time around.
Thing is, back then alts had barely moved up until that point.… pic.twitter.com/xSxzme3IlH
— Daan Crypto Trades (@DaanCrypto) June 18, 2024
This measured descent presents a double-edged sword for investors. While it offers a (somewhat) less terrifying experience, it also extends the period of financial pain. The silver lining, according to Daan Crypto, lies in the muted highs altcoins reached before the crash. Unlike previous cycles where altcoins skyrocketed before plummeting, their pre-crash performance this time around was more tempered.
The relatively lower highs suggest the market might not be as overheated as in the past. This could mean a potentially faster recovery once the correction runs its course.
Deja Vu Or Deja Boom? Analyst Sees Echoes Of 2020
Looking beyond the immediate altcoin downturn, Daan Crypto draws parallels between the current market and the events of 2020. The analyst points to the strong performance of the market in 2023, particularly impressive for a year following a bear market. This mirrors the robust performance of late 2019, which preceded the 2020 crash.
If we compare 2023 to 2019 and 2024 to 2020, there are some interesting similarities, the analyst observes. Just like 2020, which witnessed a mid-year slump followed by a strong year-end recovery, 2024 might be following a similar trajectory.
This historical comparison offers a glimmer of hope for investors weary of the current downturn. The possibility of a later-year rebound, similar to what transpired in 2020, could provide a much-needed boost to market sentiment.
Featured image from DeviantArt, chart from TradingView