Are Altcoins Done? Trader Issues Alert Amid ‘Scary’ Behavior in Chainlink (LINK) and Others
A widely followed crypto strategist is warning about the altcoin market as projects like Chainlink (LINK) correct.
Pseudonymous analyst Altcoin Sherpa tells his 214,900 followers on the social media platform X that most altcoins may enter a months-long consolidation phase.
“It’s quite possible that altcoins are done for the next one to four months. There are certainly going to be outliers, but I think that the majority need time to chill out and consolidate after such a big run.”
The analyst says that Chainlink, a provider of decentralized oracle services for smart contracts, is illustrative of other alts. LINK is correcting after 4x gains following a lengthy accumulation phase, according to the analyst.
“The scary thing is that many alts didn’t even run that hard over the last few months. Look at coins like LINK. 500-plus days in accumulation and only a 3x-4x gain (depending where you got in) and now price is strongly pulling back.”
LINK is trading for $13.21 at time of writing, down more than 1% in the last 24 hours.
The analyst believes that in the months ahead only specific sectors of the crypto market will perform well, including well-established projects like Ethereum (ETH) and Solana (SOL).
He also expects strength from artificial intelligence (AI) related projects, memecoins and newer projects like Ethena (ENA), a governance token launched by Ethena Labs for the project’s decentralized finance protocol, and cross-chain messaging protocol Wormhole (W).
“We now have very fragmented liquidity where only a few sectors are pumping…
I think other normal coins will also get some attention too but the sectors I’m mostly focusing on are:
1. Memes: obvious
2. Move to real value. With so much trash on the market, boring shit like ETH, SOL, etc. is probably going to just good.
3. Big token launches. Think stuff like ENA. They have a ton of money behind it, lots of marketing, and have some real value. Although coins like W have performed poorly, I still think those do very well once BTC stabilizes. MMs (market makers) are going to send this thing higher.
4- AI: Obvious as well.”
At time of writing, ENA is trading at the $0.9311 level while W is at $0.5697.
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