A top analyst, who accurately predicted the end of the 2021 Bitcoin bull market, is now explaining the reasons behind the recent altcoin meltdown. Crypto strategist Pentoshi highlights the impact of momentum in moving markets, attributing the altcoin market crash to an oversupply of new coins. This surge in new altcoins led to a depletion in demand, resulting in a shift in momentum and a subsequent drop in value for the altcoin market.
Despite the significant correction in the total altcoin market value (TOTAL3) from its peak in 2024, Pentoshi remains optimistic about the ongoing crypto bull market. He emphasizes that this downturn is a local correction, not a macro top, and suggests that the market will recover and continue its upward trend. Presenting a chart indicating support around $600 billion for TOTAL3, Pentoshi predicts a rally to a $1 trillion valuation, indicating a potential opportunity for investors to capitalize on the market fluctuation.
As TOTAL3 currently trades at $620 billion, Pentoshi encourages traders to stay vigilant and monitor key factors that could impact market structure, such as Bitcoin outflows from exchange-traded funds. Despite the recent correction, he views this as a normal occurrence in the crypto market cycle and suggests that additional corrections may occur in the future as the market evolves. This analysis provides valuable insights for investors seeking to navigate the volatile altcoin market and make informed decisions based on market dynamics.