Lead Analyst Explains Mechanics Behind Recent Altcoin Crash, Cites Bears Taking Control After Loss of Momentum
A renowned analyst, known for accurately predicting the end of the 2021 Bitcoin bull market, is shedding light on the factors that caused the recent altcoin market crash.
Pentoshi, a pseudonymous crypto strategist, emphasizes the significance of momentum in driving market movements. According to Pentoshi, the rapid influx of new altcoins flooded the market, depleting demand and shifting momentum towards the bears.
The analyst explains that with numerous altcoins launching daily, each coin required increasing liquidity to sustain its value. However, as supply overwhelmed demand, resulting in insufficient passive bid and liquidity, the market experienced significant downward volatility.
Pentoshi notes that the altcoin market’s total value (tracked by TOTAL3) plummeted from its peak of $788.85 billion in 2024 to as low as $563.85 billion, marking a 30% decrease. Despite the correction, Pentoshi asserts that the crypto bull market remains intact.
He believes this is a temporary local top and not the macro top, highlighting that the bull market concludes when supply becomes infinite and no buyers remain. According to Pentoshi, the market has not reached that point yet.
Examining the TOTAL3 chart, the analyst forecasts support to hold around $600 billion, with a recovery leading to a rally toward a trillion-dollar valuation.
Pentoshi encourages investors to view the current correction as an opportunity rather than a sign of a market downturn. He suggests that unless Bitcoin loses market structure or experiences substantial outflows from ETFs, the bull market will persist. Pentoshi expects additional corrections of over 30% to occur, similar to previous market cycles.
As of now, TOTAL3 is trading at $620 billion.
Source: Pentoshi/X