Nicholas Merten, known as DataDash, discusses the potential collapse of altcoins in the cryptocurrency market. He questions whether an altcoin season or cycle is still possible, given the current market conditions.
Merten analyzes various metrics and charts to support his skepticism about an imminent altcoin boom. He points out that while some cryptocurrencies like Solana have made comebacks, they're still facing significant challenges.
-
For instance, Solana's stable coin liquidity is nowhere near its previous highs, which Merten sees as a crucial indicator of real adoption and user activity.
He emphasizes the importance of new participants and liquidity entering the market to drive up prices. He notes that many altcoins, such as Cardano and Avalanche, are showing signs of stagnation or decline in both price and on-chain activity.
-
This lack of growth in user adoption and stable coin liquidity makes it difficult to justify current valuations, let alone expect significant price increases.
Merten also discusses the relationship between Bitcoin and altcoins. He argues that for altcoins to thrive, Bitcoin needs to be in a strong uptrend and reaching new highs. However, he points out that Bitcoin is currently struggling to break past its previous resistance levels, which doesn't bode well for the broader altcoin market.
In conclusion, while Merten doesn't completely rule out the possibility of an altcoin cycle, he advises caution. He suggests that investors should wait for clear signs of market strength, such as Bitcoin breaking key resistance levels, before considering altcoin investments. He warns that many insiders and early adopters might be offloading their holdings while promoting optimistic narratives to retail investors.
