10x Research: Altcoins are in a bear market, with 115 tokens down an average of 50% from this year's highs

Compiled by: Felix, PANews

Today’s headline resonates with anyone who traded altcoins in 2017 or 2021. 10x Research analyzed 115 coins and the average price has fallen by 50% from its 2024 highs. As explained below, unless the cryptocurrency’s liquidity improves, the decline will be more severe. Bitcoin (-11%) and Ethereum (-13%) are doing well, and both are likely to benefit as smarter traders switch from altcoins to these two coins (which has happened in the past two cycles Pass).

Top 115 Coins by Market Cap: Pullback from 2024 Highs (Bitcoin Only Down 11%)

Surviving the Altcoin Bear Market One of the key factors is effective risk management. Token unlocking and unfavorable liquidity indicators were the main triggers for this altcoin crash.

Last week was a pivotal moment in the crypto space and one of the most critical weeks of 2024. Cryptocurrencies, especially altcoins, fell sharply. The market had a hard time digesting the massive token unlocks of $97 million for Aptos, $51 million for IMX, $75 million for STRK, $62 million for SEI, $90 million for ARB, $18 million for APE, and $90 million for UNI, totaling $483 million. Early investors and venture capitalists appear to be under pressure to cash out. These flows are dragging down Bitcoin.

Additionally, Bitcoin miners have begun selling their Bitcoin inventories, and ETH balances on exchanges have increased by $2.5 billion, which was previously linked to potential selling pressure. Despite improving inflation data, Bitcoin ETFs experienced large net outflows (approximately $660 million in 5 days). The overall net flow across various segments (stablecoins, futures leverage, ETFs, etc.) was -$2.4 billion, which is the third week of net flow decline since the launch of ETFs in January 2024.

On May 8, 10x Research issued a warning, “Beware of token unlocks. Are VC funds shortening the altcoin cycle? As nearly $2 billion worth of tokens will be released in the next ten weeks Unlock quickly. This could lower prices in the altcoin market.” One core argument is that VC funds invested $13 billion in the first quarter of 2022 while the market quickly entered a bear market. As artificial intelligence becomes a hotter field, these funds are now facing pressure from investors to return capital.

Today, altcoins are in a brutal bear market. In 2024, 73% of these 115 tokens peaked in March. But in early March, the situation changed. Of the top 115 coins by market cap, 17% (on the left) peaked on March 14 (all are now down).

In early March 2024, Bitcoin reached a potential year-end target of $70,000. Last year, 10x Research predicted a year-end target of $45,000 for 2023. In October 2022, it was predicted that Bitcoin would rise to $63,000 by the 2024 halving. A higher target ($125,000) can be derived through quantitative analysis, but the shrinking liquidity in the crypto market is hindering the market’s development.

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