Key Takeaways
- Altcoins are expected to face a downturn until January 2025, with most losing value or consolidating over the coming weeks.
- Bitcoin shows potential for recovery, with analysts predicting it could retest $99,000, driven by short squeezes.
- Investors are advised to take a long-term view amid market volatility, as experts see current trends as a shakeout before future growth.
Felix Hartmann, founder of Hartmann Capital, forecasts a difficult phase for cryptocurrencies, predicting that most would continue to fall until late January 2025. Hartmann stated that while a few altcoins may experience short-term gains, most are projected to consolidate or progressively lose value over the next two to six weeks. “Not much alpha in chasing alts here [in my opinion], as many just topped after 2-3x moves in a week,” he remarked.
The altcoin market has experienced significant drops in the last 24 hours, with $481.62 million in long-position liquidations, as per the CoinGlass statistics.
According to CoinMarketCap, Ethena, Pepe, and Bonk had significant losses, with Ethena dropping 10.46%, Pepe down 10.62%, and Bonk falling 8.59%.
Bitcoin, which hit a record high of $100,000 on December 5, has since struggled to keep the six-figure mark. It fell below $100,000 on December 9 and is now trading at $96,270, down 1.5% in the last 24 hours. Despite this, Hartmann believes Bitcoin has a “fair chance” of retesting the $99,000 level, citing “short squeezes” as a catalyst for more price activity.
Daan de Rover, co-founder of CryptoSea, expressed similar comments in a December 10 post on X, indicating that liquidity is piling above Bitcoin’s current prices. “There is a lot of liquidity developing up on the top side of Bitcoin. “We all know what happens next,” he said. If Bitcoin reaches $99,000 with a 2.41% increase, nearly $1.53 billion in short positions may be liquidated, perhaps leading to more upward momentum.
Pseudonymous trader “Mister Crypto” voiced optimism about the market’s future, citing the current slump as a necessary shakeout before huge price increases. “This was the final shakeout before the real exponential breakouts,” the trader wrote in a December 10 article.
Despite the recent volatility, Hartmann believes it may be a good time for investors to take a long-term perspective. “Perfect is the enemy of good. Hence, it seems like an okay time to bring long bias back,” he stated. This cautious optimism comes amid broader uncertainty in the cryptocurrency market as traders consider potential recovery scenarios for Bitcoin and altcoins.
Final Thoughts
Venture capitalists’ anticipated altcoin slump predictions stem from a complex interplay of several factors. Among them is bearish market sentiment as investors gravitate towards established cryptocurrencies like Bitcoin, economic pressures, particularly anticipated interest rate hikes from the Federal Reserve, selling pressure from institutional investors for profit-taking, and seasonal market trends.
These elements point to an environment that is aversive to altcoin growth and stability, leading experts to anticipate sustained downtrends in altcoin. Consequently, investors should be vigilant and consider these factors when planning their investment strategies moving forward.
