- A report by Matrixport shows that the altcoins industry continued to decouple from Bitcoin amid the ETF frenzy as shown by the high BTC dominance.
- The FTX liquidation plan is expected to be a major trigger for altcoins selloff as many venture capitals take profits.
The crypto market has faced immense short-term uncertainties amid heightened volatility in the mother coin, Bitcoin during the past few days. According to a report by Matrixport, a top-rated digital assets platform, the altcoin industry is on the verge of major capitulation following huge decoupling from Bitcoin. As a result, Matrixport advised altcoin investors to take extra caution as Bitcoin’s recovery does not necessarily reflect on the alternative digital assets.
Notably, the digital asset platform argued that most venture capital firms are under pressure to return money to investors following a long period of vesting. For instance, about 11 percent of the outstanding ApeCoin (APE) coins are expected to be unlocked and freely sold to the secondary market on September 17. Notably, APE price has dropped over 24 percent since the last token unlock held on August 17.
Another notable token unlock involves the Axie Infinity (AXS), which is scheduled for October 20. Notably, about 11 percent of the AXS in circulating supply will be unlocked, which could trigger another price capitulation like the last unlock on July 22.
The report also highlighted that most venture capital firms are under pressure to deliver amid a bear market and return profits to the investors.
Recent trends in the #crypto market have led ‘Matrix on Target’ to favor Bitcoin over Altcoins. Bitcoin’s dominant performance in 2023 can be attributed to key events, while higher beta cryptocurrencies, like Ether, have faced challenges. The divergence between #bitcoin and… pic.twitter.com/VlAA61f7hM
— Matrixport (@realMatrixport) September 12, 2023
Closer Look at More Factors that Could Trigger Altcoin Capitulation
The FTX liquidation process has been a major distraction to the crypto market in the recent past. According to a Monday court filing, the current FTX leadership led by CEO John Ray III has recovered about $7 billion in assets including $1.16 billion in Solana (SOL). Notably, about $3.4 billion of the recovered FTX assets are in digital assets, thus adding more selling pressure.
In a bid to quell the crisis, Tron founder Justin Sun had pledged to absorb the TRX coins owned by FTX amounting to about $33 million.
I can buy those TRX tokens via OTC. So we are fine. https://t.co/I1if7xSf65
— H.E. Justin Sun 孙宇晨 (@justinsuntron) September 11, 2023
Meanwhile, other altcoins such as Litecoin (LTC), Polkadot (DOT), and Pepe (PEPE) have suffered low trading volume in the last few weeks. A notable decline in traded volume is a sign of declining demand, which often precedes price capitulations.
Worth noting that Pepe meme coin has suffered several attacks that have subjected its users to unwarranted liquidity drain. As a result, the frog-themed meme coin is expected to continue declining in value until it finds a solid bottom. As for Litecoin, the price decline was largely anticipated after its third halving. According to our latest crypto oracles, LTC price has dropped nearly 50 percent since July, and more losses are expected especially after the daily death cross between the 50 and 200 MA.
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