The Situation in Altcoins is Even Worse Than During the FTX Collapse: But Why, and What Can We Expect?

The cryptocurrency market is still showing no signs of recovery after the October 10 crash, which saw the largest single-day liquidation in the sector's ￰0￱ “post-liquidation stagnation” process that occurred in the market due to the effect of the approximately $20 billion selling wave became especially evident in ￰1￱ this segment, where speculative investment is concentrated, the market-cap-weighted index tracking 50 small-cap altcoins is currently below even the level seen during the FTX crash of ￰2￱ group, which also includes memecoins like “PumpFun,” is typically held by individual investors and is seen as an early indicator of market risk ￰3￱ sharp decline suggests a renewed pullback in speculative ￰4￱ remains above the $100,000 level, but hasn't recovered from a few weeks ￰5￱ largest cryptoasset has been experiencing volatility, fueled by forced liquidations triggered by exchanges like Binance following a sharp drop in collateral ￰6￱ News: Solana (SOL) Makes Unexpected Early Announcement - May Upset Users Markets are generally considered to be entering a difficult period for both hedges and momentum ￰7￱ sharp decline in gold and silver after breaking records reflects a general fatigue in the most heavily traded positions of ￰8￱ Munster, portfolio manager at Blockforce Capital, described the sell-off as reflecting “not the crypto’s fundamental value, but rather a shift by short-term investors in their positions against macroeconomic volatility.” However, according to Munster, the process also exposed the platforms’ structural vulnerabilities based on opaque risk engines.

A similar cooling-off trend is also evident in the ETF market. BlackRock's $88 billion iShares Bitcoin Trust fund experienced a total outflow of $400 million in five trading days. Meanwhile, the Ethereum-based ETHA fund withdrew $260 million in two ￰9￱ these figures are modest compared to its asset size under management, they are a sign of declining interest from individual ￰10￱ markets also remain ￰11￱ to K33 Research data, funding rates for Bitcoin futures have been negative for the past week, suggesting investors are paying to maintain their short ￰12￱ open interest remains low, volatility selling in options markets has increased, suggesting investors are anticipating sideways price ￰13￱ for $100,000 Bitcoin put options remains high, according to Coinbase's Deribit ￰14￱ defensive positioning contrasts with the risk appetite in ￰15￱ are now focused on Friday's US CPI data.

A higher-than-expected inflation reading could put pressure on both digital and traditional hedge ￰16￱ to Vetle Lunde, Research Director at K33 Research, “risk appetite has completely reversed since October 10th,” and this situation resembles “typical post-mass liquidation processes”: low volume, weak interest, and increased short positions. *This is not investment ￰17￱ Reading: The Situation in Altcoins is Even Worse Than During the FTX Collapse: But Why, and What Can We Expect?