A prominent cryptocurrency analyst says last week’s altcoin crash will continue to wreak havoc on the industry for months, predicting investors will sell out. Here are the details…
The expert is waiting for liquidation in these altcoin projects
As we have also reported as Kriptokoin.com, LUNA lost almost all its value with the stablecoin TerraUSD (UST), which diverged from the US dollar. The UST later suffered heavy losses and the fall of both cryptocurrencies had a ripple effect on the altcoin market. Weiss Ratings crypto analyst Alex Benfield says altcoin liquidity and buyer-side demand seem to have “dried up.” “Many projects will suffer huge losses in the coming months as investors start to gain value again,” Benfield said. Interesting times await us,” he said.
Benfield believes that many investors and institutions have altcoins backed by the Ethereum Blockchain network instead of market leaders Bitcoin (BTC) and Ethereum (ETH). He stated that he preferred liquidation. Examples of these coins are Chainlink (LINK), Polygon (MATIC), Decentraland (MANA), Uniswap (UNI), ApeCoin (APE), Aave (AAVE), and The Sandbox (SAND).
Analyst pointed to the crash in LUNA: Unprecedented
noting that unlike the bearish sentiment in altcoins, Bitcoin and Ethereum are showing bullish signs after falling close to the highs of the previous bull market. “Sure, (BTC and ETH) prices could drop from here, but it looks like this (BTC) market has bottomed out,” Benfield said. Benfield said the collapses of the LUNA and the UST were one of those nearly unprecedented. Having hit an all-time high of $115 in April, LUNA is down one percent.
Benfield said, “Many large hedge funds and institutions had large positions in LUNA and UST, and this collapse has forced many to liquidate other altcoin holdings to secure cash. Obviously, this had volatile effects in the market and caused the prices of other altcoins to drop,” he said. “Investors who were already concerned about the macroeconomic factors affecting the crypto market also panicked when they witnessed the explosion of the Terra ecosystem,” Benfield said.
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