On according to the analytical company CryptoQuantMore than a third of altcoins have reached historic lows, suggesting a sharper decline than after the FTX crypto exchange crash.
This situation demonstrates how vulnerable altcoins still are. In fact, this is the sharpest altcoin decline of the entire cycle, CryptoQuant stated.
CryptoQuant Data
However, the current decline differs from the FTX-era crisis, which was largely caused by forced liquidations and panic selling. This time, there is virtually no evidence of widespread problems. Most likely, although forced sellers are currently few, the decline in altcoin prices may be due to low liquidity, reduced risk exposure, and a shift of funds into leading cryptocurrencies. Bitcoin и эфириум.
At the moment, traders give away preference for a small number of higher-quality, «historical» tokens such as BTC, ETH, and SOL. Exchanges like Coinbase also concentrate liquidity on a small number of assets represented, putting even more pressure on tokens with smaller capitalizations.
At the same time, investors and market analysts wonderCould a Purchasing Managers’ Index (PMI) reading above 50 trigger another rally in altcoins?
Typically, values above this value indicate economic growth, while values below 50 indicate decline. Altcoin prices have traditionally been highly dependent on liquidity and market risk appetite. These assets experienced growth in value during the early and middle stages of economic recovery, supported by increased liquidity. However, today the world is gripped by enormous geopolitical tensions, and some companies are already feeling the effects.