Are Altcoins in Trouble? Analyst Raises Concerns Amid Volatile Behavior in Chainlink (LINK) and Other Projects
A highly regarded cryptocurrency strategist is sounding the alarm about the altcoin market as certain projects, including Chainlink (LINK), experience significant price corrections.
Altcoin Sherpa, an analyst who goes by a pseudonym, has shared his concerns with his extensive following on X, a popular social media platform. According to Altcoin Sherpa, many altcoins may be entering a consolidation phase that could last for several months.
“I believe there’s a good chance that altcoins will struggle in the next one to four months. While there may be exceptions, I think the majority of altcoins need some time to cool off and stabilize after significant price increases,” warns the analyst.
The performance of Chainlink, a provider of decentralized oracle services, allegedly reflects the behavior of other altcoin projects. As per the analyst, LINK is currently undergoing a correction phase after experiencing a fourfold gain following an extended period of accumulation.
“The concerning thing is that many altcoins didn’t even experience significant price rallies over the past few months. Take coins like LINK, for example. After being accumulated for over 500 days, it only achieved a 3x-4x gain (depending on the entry point) before seeing a noticeable pullback in price.”
At the time of writing, LINK is trading at $13.21, displaying a decline of over 1% in the past 24 hours.
The analyst anticipates that in the forthcoming months, only specific sectors within the cryptocurrency market will demonstrate strength. Established projects like Ethereum (ETH) and Solana (SOL) are predicted to perform well, along with artificial intelligence (AI)-related ventures, meme coins, and emerging projects such as Ethena (ENA) and Wormhole (W), a cross-chain messaging protocol.
“We currently observe fragmented liquidity, with only a few sectors experiencing price pumps. I do believe that other conventional coins will receive some attention as well, but I’m primarily focusing on sectors such as memes, valuable projects like ETH and SOL, big token launches like ENA, and AI-related ventures. These sectors have strong backing, considerable marketing efforts, and genuine value. Although coins like W haven’t performed well thus far, I still expect them to flourish once Bitcoin stabilizes. Market makers will push their prices higher,” notes the analyst.
As of now, ENA is trading at the $0.9311 level, while W is priced at $0.5697.