Crypto: Ethereum Drops 4%, XRP Plunges 12% as Bitcoin Holds Steady

Altseason, that period when altcoins stir the markets and eclipse Bitcoin, seems like a recurring mirage. It’s often talked about, but it is rare and, when it happens, often fragments as quickly as it formed. So, is the promise of a new altcoin explosion serious? Are we about to see a boom in Solana, Ethereum, and XRP, or is this phenomenon just a dream too fleeting for crypto investors?

Altcoins Under Pressure: Correction or Just a Pause?

The crypto market has recently shown signs of consolidation. After a strong rise, Bitcoin stabilizes around $120,000, and with it, altcoins have also seen their prices climb. But this BTC stability seems insufficient to sustain the momentum of altcoins like Ethereum, XRP, and Solana.

Within 24 hours, Ethereum lost 4% and XRP plunged 12%, despite some bitcoin stability, which only fell by 0.6%.

Analysts highlight that this correction does not seem linked to a clear catalyst, but rather a natural adjustment. Min Jung, analyst at Presto Research, explains:

This seems more like a breather or profit-taking event, especially considering that Ethereum is still up 7%.

The altcoin rally has often been driven by quick gains, and once enthusiasm fades, a correction becomes almost inevitable. This phenomenon reminds us that altseason is as volatile as it is fascinating, with spectacular rises followed by sudden drops.

Liquidations: A Destabilizing Effect on the Crypto Market

Massive liquidations have also played a major role in the altcoin decline. The price correction is exacerbated by overly risky long leveraged positions, particularly on Ethereum and XRP. According to Coinglass data, forced selling represented over $837 million in liquidations in the crypto market, including $168 million for Ethereum and $92.7 million for XRP. This cascade liquidation phenomenon directly impacts the price of these altcoins.

Experts attribute this dynamic to a domino effect caused by excess leverage. Ryan McMillin, Chief Investment Officer at Merkle Tree Capital, mentions this pressure by pointing out that the altcoin market is currently under pressure due to liquidations related to overly risky long positions.

Such a dynamic illustrates the fragile nature of altcoins which, although very performant during rallies, quickly show their limits when a correction wind blows on the market. Solana, for example, has seen a record increase in its open interest on derivative contracts, suggesting overheating that could lead to new liquidations.

Altcoins in a Delicate Position: What Does the Future Hold?

Investors now wonder: are altcoins simply in a temporary correction phase, or are we witnessing a deeper turnaround? Predictions remain divided. Macroeconomic factors, such as possible rate cuts by the Fed, and Bitcoin’s consolidation around $120,000, support some analysts’ optimistic view. According to them, the market could resume its upward march as soon as the current correction is absorbed.

However, several short-term fatigue signs indicate that this recovery could take longer than expected. The correction may offer opportunities to those who navigate volatility cautiously. Investors should closely watch altcoin support levels, notably Ethereum and Solana, to identify potential entry points for a rebound.

Some key figures on the current correction:

• Ethereum fell 4% in 24 hours, despite a 7% weekly gain;
• XRP lost 12%, with liquidations totaling $92.7 million;
• More than $837 million in liquidations have affected the entire crypto market;
• Solana saw its open interest reach record levels, but its price remains at 30% of its peak;
• The correction was exacerbated by high leverage positions and cascade liquidations.

A few months ago, an analyst predicted an altseason 250 times more powerful. However, with the ongoing correction and persistent volatility in altcoins like Ethereum and Solana, these forecasts appear somewhat overly optimistic. If altseason can still happen, it might not be as spectacular as hoped. The key to the future of altcoins lies in short-term risk management while monitoring macroeconomic factors that, in the long term, could offer new opportunities.