What analysts say about the altcoin bloodbath

Cryptocurrency markets have plunged, with some altcoins falling more than 10%, but one industry analyst noted there was no “clear catalyst” to explain why.

The cryptocurrency market cap has fallen to $2.46 trillion, down 3.5% in the past 24 hours. According to CoinGecko data, on June 17, Shiba Inu and Avalanche were the two worst hit altcoins among the top 20 by market cap, falling 12.7% and 10.6% respectively on the day.

Uniswap (UNI) and Dogecoin also saw double-digit declines, while Solana fell 9.4%. Ripple’s XRP was the only non-stablecoin not to lose money, though it saw a small gain of 0.1%.

In the past 24 hours, Bitcoin and Ethereum have fallen by 1.3% and 4.4%, respectively.

Price changes of the top 15 tokens by market cap over the past hour, 24 hours, and 7 days. Source: Coingecko

Henrik Anderrson, chief investment officer at asset manager Apollo Crypto, said he couldn’t pinpoint the main reason for the market’s drop — but he suggested that a recent drop in interest in spot bitcoin exchange-traded funds could be a factor.

“There is no clear catalyst from what I can see, but it looks like negative flows from the BTC ETF led to altcoin weakness, which triggered liquidations among leveraged long traders in Bitcoin, Ethereum, and Dogecoin,” Andersson noted.

According to data from Farside Investors, spot bitcoin ETFs have seen outflows in five of the past six trading days.

Digital asset firm 10xResearch also linked the recent altcoin crash to a drop in spot Bitcoin ETF flows over the past week — but argued that the relationship between the two is inversely proportional.

“While Bitcoin’s failure to rebound despite weak inflation data was surprising, the collapse of Ethereum and altcoins was probably predictable,” 10xResearch added.

Bitcoin miners grow double-digit despite price crash

Meanwhile, one industry analyst said Bitcoin mining stocks have performed strongly in recent weeks and are currently recovering some of the losses from April’s halving event.

“Mining stocks have underperformed ahead of the halving due to concerns about profitability after the halving,” said Mitchell Askew, chief analyst at Blockware Solutions.

But those concerns have now been alleviated, and mining stocks are regaining balance after underperforming bitcoin and its proxy stocks such as MicroStrategy (MSTR).

Askew noted that the Valkyrie Bitcoin Miners exchange-traded fund WGMI is now up about 54% since the halving event, suggesting that market confidence has returned to the mining industry.