Crypto market collapses, Ethereum and Solana suffer

The altcoin industry, led by Ethereum (ETH) and Solana (SOL), has been significantly impacted by the recent market crash triggered by major global stock indices. Since the beginning of March this year, the altcoin market capitalization has dropped from around $1.27 trillion to around $866 billion on Monday.

What were the causes of this drastic downturn?

The excitement surrounding the approval of spot Ethereum ETFs in the U.S. has been overshadowed by significant outflows, with Grayscale's ETHE seeing net outflows of nearly $3 billion since approval last month.

In addition, US spot Ether ETFs saw net outflows of $420 million, with total assets under management currently at around $7.35 billion.

Seasonal trends: Are altcoins facing further difficulties?

Historical data shows that August and September are often weak months for the crypto industry, especially after the Bitcoin halving. The recent sell-off by Jump Trading, which saw many Ethereum holdings liquidated, has caused significant ripples in the altcoin market. Jump Trading currently holds over $60 million worth of Ether, which could soon be sold.

Market sentiment

The recent Bitcoin sell-off by the US government, which transferred 10,000 BTC to Coinbase for sale, has increased fears of further market declines. The Ethereum Fear and Greed Index has fallen to 34%, indicating growing investor fears.

Expert advice: What investors can do

Crypto analyst Michaël van de Poppe says now is a good time to enter the altcoin market and prepare for the next bullish phase. Van de Poppe believes that many altcoins are bottoming out against Bitcoin and could soon see a major recovery.

Furthermore, Bitcoin dominance has formed a weekly reversal pattern, with a rising wedge associated with a bearish divergence on the weekly Relative Strength Index (RSI).

In addition, the Fed is on the verge of its first interest rate cut since 2021 ahead of the upcoming US elections.

Also read: Will DeFi tokens skyrocket with memecoins’ bullish turn?

The altcoin market is in turmoil. Do you buy on the dip or wait for a clearer picture?