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Altcoins are healing from the bloodbath, but the process is sluggish and there are warning signals. While the price and social volume of the top 25 altcoins have decreased, the trading volume has risen steadily. The prices of Ethereum, Cardano, Binance Coin, Dogecoin, XRP, and Polkadot have fallen by more than 30% in the last week. Furthermore, Bitcoin’s domination has fallen to 45 percent, while Ethereum’s has fallen to less than 20 percent. Despite the general decline in crypto market capitalisation, altcoin domination has risen.
The increasing domination and trading amount of altcoins are critical to the altcoin rally and market recovery. In the case of Ethereum, the price is regaining ground after a decrease in trading value. The concentration of big HODLers is at 41%, which was the same amount as the altcoin was priced in the $2500 range.
Since the price decline of Ethereum has not had a negative effect on its concentration of big HODLers or the viability of HODLers, this indicates that Ethereum is undervalued and a rebound is underway. According to coinmarketcap.com, 90% of HODLers was successful at the present price stage. In the case of DeFi coins, the market recovery of Uniswap [UNI], Wrapped Bitcoin [WBTC], and Aave AAVE has begun.
According to the above Lunarcrush social supremacy map of AAVE, an increase in social volume has resulted in an increase in AAVE’s worth. This is also so for other DeFi tokens. There is a connection between social volume and selling pressure; however, amid a rise in social volume, DeFi tokens are resisting selling pressure.
Maker [MKR], Pancake [CAKE], Thorchain [RUNE], Synthetix [SNX], and Sushiswap [SUSHI] have all risen in volume, defying the bloodbath’s selling pressure.
The rise in leveraged trades in ETH and BTC is one of the primary causes of the altcoin bloodbath. Overleveraged ETH longs may have contributed to a decline in Ethereum’s price when it was on its way to $6000.
Despite the fact that ETH’s market capitalisation has fallen from half a trillion to $259 billion, ETH’s market capitalisation is now almost a third of BTC’s market capitalisation since it dropped to $689 billion. Overleveraged trades have caused a drop in recent price rallies, including those in 2020 and 2017. The increase in social scale, trading volume, and the decrease in leverage transactions are the main factors to look for in the altcoin price recovery.