Trading Volume Decreases and Investment Sentiment Weakens... When Will the Altcoin Market Rebound?

Ethereum at 15-Month Low

Global Liquidity is Increasing Again

"The Cryptocurrency Bull Market is Not Over"

Uncertainty stemming from the 'tariff war' initiated by Trump is overwhelming the market, causing altcoin (cryptocurrencies other than Bitcoin) trading to shrink. Market experts predict that as cryptocurrency investment sentiment freezes, volatility may intensify further for the time being.

According to the industry on the 1st, many altcoins, including Ethereum, have seen significant declines this year and are struggling to find a rebound opportunity. Cryptocurrency data analysis company Kaiko stated, "Ethereum's price recently hit a 15-month low, and its returns compared to Bitcoin have worsened," adding, "Professional investors maintain a bearish outlook regardless of Ethereum's upcoming Pectra upgrade next month."

According to the domestic cryptocurrency exchange Upbit, the leading altcoin Ethereum recently fell to 2.85 million KRW. Ethereum's relative value compared to Bitcoin is also at its lowest since June 2020. During the same period, Solana fell by 30%, and Dogecoin by 42%.

The overall trading volume in the cryptocurrency market has shown a declining trend. Cryptocurrency data analysis firm Santiment stated in a recent research report, "The total cryptocurrency trading volume has been steadily decreasing since peaking in February," and analyzed, "The current market has weakened momentum, and without strong buying pressure, it may be difficult to continue the upward trend." Observations suggest that it is still too early to expect a solid rebound for altcoins.

Cryptocurrency analyst Benjamin Cowen noted, "The recent slowdown in the pace of balance sheet reduction (QT) by the U.S. Federal Reserve (Fed) at the March Federal Open Market Committee (FOMC) meeting is positively evaluated for (risk asset investment)," but added, "The Fed has decided to maintain the existing pace of mortgage-backed securities (MBS) repayments. It is still too early to see this as a loosening of monetary policy." He continued, "Bitcoin is showing relatively strong defense, but altcoin investment sentiment is significantly weakened."

Amid heightened market volatility, there is analysis that a tentative buying opportunity is emerging. Cryptocurrency specialist newsletter Asymmetric stated, "Global liquidity is increasing again, and volatility has returned to the cryptocurrency market," and predicted, "The expansion of liquidity and volatility is likely to lead to buying opportunities." Additionally, they noted, "The recent bearish trend is largely due to the spread of risk aversion sentiment as risk assets were massively sold off in the traditional financial market due to the Trump tariff issue."

There is also a perspective that anticipates a long-term bullish trend. Cryptocurrency strategist Michael van de Poppe argued, "The Dollar Index, which calculates the value of the dollar against major currencies, has recently shown weakness," and "The yield on the U.S. 10-year Treasury bond has also been on a downward trend this year, increasing the likelihood of risk assets like altcoins gaining upward momentum. The cryptocurrency bull market is not over yet." Typically, cryptocurrency prices are inversely related to the value of the dollar. Additionally, when bond yields fall, there is a tendency for funds to flow into risk assets.

Kang Min-seung, Bloomingbit Reporter minriver@bloomingbit.io