Altcoin Market Faces Significant Decline as Selling Pressure Intensifies

In the past 24 hours, the altcoin market has experienced considerable selling pressure, leading to significant losses across many major tokens and a notable decrease in market capitalization, excluding Bitcoin and stablecoins.

Key Takeaways

The total cryptocurrency market cap excluding Bitcoin dropped to around $1.2 trillion, representing a decline of about $50 billion, or over 4%.
Major altcoins have posted sharpweekly losses, with Ethereum falling below $3,000 and Solana losing more than 11%.
The overall market structure for altcoins shows weakness, as they continue to print lower highs and lose key support levels.
Bitcoin's drop below $90,000 has contributed to accelerated losses in altcoins, reflecting a broader market risk-off sentiment.

Altcoin market sees sharp drawdown as selling pressure accelerates

Market Overview

The total crypto market cap, excluding Bitcoin, has seen a significant drop, currently sitting at approximately $1.2 trillion. This marks a daily loss of around $50 billion, equating to a decline of just over 4% based on recent daily trading data. Notably, trading volume remains high at about $147 billion, indicating that the sell-off is driven by active decisions to reduce risk rather than a result of low liquidity.

Major Altcoins Experience Substantial Weekly Losses

Within the large-cap altcoin category, losses have been pervasive, extending well beyond typical short-term fluctuations. Ethereum has fallen below $3,000, reflecting a 7% drop for the day and nearly 7% over the week. Similarly, Solana has slipped to around $127, experiencing a decline of more than 11% on a weekly basis.

Altcoins price trend

Source: CoinMarketCap

XRP has also struggled, seeing a decline of over 11% in the past week, while Dogecoin and Cardano posted similar losses exceeding 14%. Even relatively stable large-cap tokens suffered, with BNB down more than 5% over the week, and Tron, while less severely affected, still closed negatively. Monero particularly stood out, with weekly losses surpassing 25%, underscoring the extent of the market downturn.

Weakening Market Structure for Altcoins

The total market cap chart, excluding Bitcoin, shows a clear deterioration in market structure. After an unsuccessful attempt to regain the $1.3 trillion mark earlier this month, the market has been unable to sustain a rally and continues to form lower highs. The latest decline has pushed prices down to levels not seen since mid-2024.

Altcoins market cap

Source: TradingView

Momentum indicators signal increasing downside pressure, with the daily RSI dipping below 40, indicating a weakening of buyer strength. Additionally, marked spikes in trading volume during down days suggest that distribution is occurring instead of a phase of consolidation. This scenario illustrates that capital is moving out of altcoins at a faster pace compared to Bitcoin, indicating a classic "risk-off" behavior where traders tend to first reduce their exposure to higher-risk assets.

Bitcoin's Influence on Altcoin Performance

While Bitcoin's value is excluded from the total market cap calculations, its recent drop below $90,000 seems to have exacerbated losses among altcoins. Historically, sharp declines in Bitcoin prices often lead to amplified volatility across the broader crypto market, particularly during times when leverage is being unwound and overall confidence wanes.

Under current conditions, with Bitcoin's recovery uncertain and liquidity tightening, altcoins are likely to remain susceptible to further declines in the near term.

Conclusion

In summary, the altcoin market is grappling with significant selling pressure, as seen through substantial losses across major tokens and a weakening market structure. With Bitcoin's performance impacting altcoins negatively, traders should remain cautious as the market navigates these turbulent waters.