Altcoin Season in Jeopardy: Crypto Market Plummets as Ethereum & Solana Suffer

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The altcoin industry, led by Ethereum (ETH) and Solana (SOL), has significantly impacted the recent market crash fueled by major global stock indexes. Since early March this year, the altcoin’s market cap has slipped from around $1.27 trillion to around $866 billion on Monday. 

Despite the jubilant reaction to the approval of spot Ethereum ETFs in the United States, the overall impact has been notable cash outflows.

Grayscale’s ETHE has registered a net cash outflow of nearly $3 billion since the approval last month. 

The US spot Ether ETFs have registered a net cash outflow of $420 million, as the current net assets under management are about $7.35 billion.

More Pain for the Altcoin Industry 

Historical data shows that August and September are considered bearish months for the entire crypto industry, especially after the Bitcoin halving. Jump Trading’s ongoing sell-offs, which have liquidated many Ethereum holdings, have sent shockwaves through the altcoin industry.

As of this writing, Jump Trading has over $60 million worth of Ether left in its holdings, which could be liquidated ahead.

In addition to the recent Bitcoin sell-off by the United States government, which transferred 10k BTC to Coinbase for sale, the fear of further capitulation has significantly increased. 

The Ethereum’s fear and greed index has dropped to 34 percent, denoting heightened fear of further capitulation.

Silver Lining 

According to a reputable crypto analyst, Michaël van de Poppe now is the time to Dollar-Cost-Average (DCA) into the altcoin industry in preparation for the next bullish wave. The crypto analyst noted that most altcoins against Bitcoin have already bottomed out and are on the cusp of a major reverse soon. 

Furthermore, Bitcoin’s dominance has been forming a weekly reversal pattern, whereby a rising wedge is coupled with a bearish divergence on the weekly Relative Strength Index (RSI).

Additionally, the Fed is about to initiate its first interest rate cut since 2021 ahead of the upcoming U.S. general elections.