Altcoins Show Weakness, Prompting Analysts to Consider a Crypto Market Correction

Crypto News- According to an analyst, a period of rest for a few months could be imminent, allowing investor cost bases to readjust above the True Market Mean Price. Despite the recent correction, the market has yet to experience a drawdown of more than 20% this year, indicating persistent and robust spot demand.

Comparing to the previous bull market, where drawdowns exceeded 60%, it’s worth noting that these corrections are part of the current bull cycle and not indicative of bear market bottoms, which typically see declines of more than 80% from the previous peak.

Altcoins Show Weakness, Prompting Analysts to Consider a Crypto Market Correction

JRNY Crypto, with a substantial following of 767K, reminded followers of a significant crash before the last bull market, emphasizing that a similar run in 2019 was followed by one of the worst crashes just before the last Bitcoin Halving. However, it’s crucial to note that the mentioned crash in 2020 was a result of the global market meltdown triggered by the black swan event of Covid lockdowns in March.

Expressing caution, JRNY Crypto stated, “I wouldn’t be surprised to see at least one more market correction before the real bull market starts,” citing current geopolitical tension and economic uncertainty as potential factors delaying a full-fledged bull run.

Trader Justin Bennett added perspective, noting that the last two bear markets concluded with a second capitulation, and he suggested not ruling out a $25k liquidity sweep. Currently, Bitcoin remains steady at $41,600, maintaining a total market capitalization of around $1.61 trillion.

While Bitcoin holds its ground, altcoins are starting to retreat, with many in the red during the Tuesday Asian trading session. High-cap altcoins have experienced moderate declines of 1 to 3%, while some, like Solana (down 7.2%) and Chainlink (down 5.8%), are taking more substantial hits.

Notably, altcoin markets have trailed behind Bitcoin during the recent rally, reaching resistance levels after 18 months of consolidation. As the crypto landscape navigates geopolitical uncertainties, economic challenges, and potential market corrections, investors are closely watching for signals of the next significant market move.