Altcoins experience significant shifts in value due to market fluctuations

Several alternative cryptocurrencies (altcoins) have seen significant declines in value recently, which contrasts with Bitcoin’s volatility. AVAX and ADA have both seen a complete reversal of their 2024 gains, falling back to levels last seen in late 2023.

The digital currency market witnessed a downturn as it struggled with lingering bearish sentiments from the previous week. Data from CoinMarketCap showed a 1.63% decline in the total market capitalization over the past 24 hours.

A notable catalyst for the market turmoil was Bitcoin (BTC), which led the downturn by hitting a monthly low of $64,500, a level not seen since mid-May.

The current downturn has been marked by significant outflows of over $200 million from BTC spot markets in the last 12 hours alone.

Investors’ cautious attitude toward the primary digital asset was also reflected in U.S. spot BTC ETFs on June 17, where total outflows reached $145.9 million, Farside Investors reported.

However, the biggest burden of the market crash fell on altcoins, with most of them experiencing price declines of over 50%. When compared to BTC’s 10% drop from its March peak, the drop to $65,000 was particularly telling.

Altcoins such as Solana (SOL) and Cardano (ADA) saw significant declines, with SOL down about 4% in 24 hours and ADA crashing 55% from its 2024 high to $0.37, returning to price levels last seen in November 2023.

In addition, Avalanche (AVAX) also recorded a decline of about 10% on the daily charts, falling to levels reminiscent of December 2023. This pattern highlighted the vulnerability of altcoins to market fluctuations.

While the market has been challenging for long positions, as evidenced by the liquidations of over $240 million, there are uncertainties regarding its impact on trading and potential market stabilization due to the upcoming US holiday on June 19.

**Additional facts:**

– The volatility of the cryptocurrency market is influenced by various factors such as regulatory developments, market sentiment, technological advancements and macroeconomic conditions.
– Altcoins, alternative cryptocurrencies to Bitcoin, offer diverse use cases such as smart contracts, decentralized finance (DeFi), non-fungible tokens (NFTs), and more.
– Altcoins are often viewed as riskier investments compared to Bitcoin due to their smaller market capitalization, higher volatility, and susceptibility to price manipulation.

**Key question:**
1. **Why are altcoins subject to greater price fluctuations compared to Bitcoin?**
– Altcoins are influenced by a variety of factors and have lower liquidity compared to Bitcoin, which can amplify price movements.

2. **How ​​do investors navigate the risks associated with investing in altcoins during market turmoil?**
– Investors often diversify their portfolios, conduct thorough project research, use risk management strategies and stay up to date with market trends.

3. **What role do regulatory developments play in the performance of altcoins in the face of market fluctuations?**
– Regulatory changes can impact investor confidence, adoption, and the entire altcoin ecosystem, contributing to price volatility.

**Advantages:**
– Altcoins offer the possibility of higher returns compared to traditional investments due to their growth potential and innovative technologies.
– Diversifying into altcoins can help investors spread risks and make profits across different sectors of the cryptocurrency market.

**Disadvantages:**
– Altcoins are inherently riskier investments due to their smaller market capitalization, lack of regulation, and susceptibility to manipulation and fraud.
– Price volatility in altcoins can result in significant losses for investors, especially during times of market declines and unexpected events.

**Relevant Links:**
– Coindesk
– Cointelegraph