YEREVAN (CoinChapter.com) — The crypto markets are not done scaring you yet. If the recent downturn wasn’t enough to dampen the “Spot-Bitcoin-ETFs-Are-Here” chants, here are several more reasons to stay alert and not give in to the madness.
#1 Solana Might Take a Hit Before Another Rally
Yes, Solana (SOL) has been the most successful smart contract platform (SCP) in 2023 regarding revenue growth, capital inflow, and dominance growth. However, it’s not just rainbows and ponies for this Layer 1, as it could drop in Q1, 2024 before picking up again.
SOL/USD exchange rate stood at $84 on Jan 24. As CoinChapter reported before, Solana failed a crucial test and extended its decline below the main $90 and $88 support levels. There was a close below the 23.6% Fib retracement level of the main increase from the $17.75 swing low to the $126.66 high.
The Solana Bulls might still defend the $60 zone. However, more losses might send the SOL price toward the $45 support. Crypto analyst Jebb McAfee, the host of the Youtube channel Crypto Jebb, backed the fears scalling the $45-60 zone a “likely target” for Solana in the short term.
The main reasons behind the possible drop concern Bitcoin and other leading altcoins that will follow shortly down the list. The BTC drop below $40,000 was possibly due to the market’s “sell-the-news” reaction to the spot bitcoin ETF approvals, Grayscale’s Bitcoin sales, and a ripple effect from the FTX bankruptcy-related asset liquidations.
In detail, on Jan 22, Grayscale transferred over $600 million in Bitcoin to Coinbase, raising their total holdings on the platform to more than $2 billion. Concurrently, FTX’s bankruptcy administrators completed the sale of their entire holding of 22 million Grayscale stock GBTC shares, which was valued at close to $1 billion. This extensive selling activity contributed to downward pressure on prices.
Let’s move on to the threats to other leading altcoins as the ‘Bitcoin effect’ still holds.
#2 Crypto Prediction For ETH Is $1.8K In Q1 2024
Ethereum (ETH) could drop to $1,800 from the current $2,230 due to the abovementioned factors for Solana.
Additionally, the platform’s notoriously high trading fees and lack of funds from institutional investors could dampen its chances to recover in the current quarter and make crypto predictions for Q1 2024 bearish.
The same reason also concerns Solana investors and Cardano, another leading altcoin we’ll discuss in a minute. The Ethereum network saw a whopping $13.6 million outflow in the previous week ending Jan 21.
Additionally, a key on-chain metric, the Market Value to Realized Value (MVRV) ratio (orange on the chart above), suggests a significant sell-off opportunity for Ethereum, backing the bearish predictions for the altcoin in Q1, 2024.
The MVRV ratio indicates that Ethereum’s market value is considerably higher than its realized value (the value at the last transaction), prompting traders to sell their Ethereum holdings to realize potential profits. This inclination towards selling can contribute to downward pressure on Ethereum’s price.
#3 Cardano (ADA) To Consolidate, As Usual
Cardano (ADA) was never one for explosive rallies. However, the top-10 altcoin could see more pain ahead in Q1, 2024 as clouds gather over Bitcoin & Co. Notably, much of the looming trouble comes from Ethereum, an altcoin market leader.
If the current correction continues, a likely target for ADA would stand at the $0.4 support, or another 15% lower than the current value of $0.46 according to the crypto predictions. Notably, Cardano charts exhibited the same bearish MVRV featured in the ETH daily chat.
“Cardano is likely to spend the next two months trading sideways, as a result of Bitcoin’s bearishness,” agreed Crypto Jebb, also noting that the altcoins mentioned are likely to experience a “massive rally” after the downtrend, thanks to the accumulation of total value locked (TVL) in the previous quarter.
Thus, while crypto predictions for Q1 2024 remain bearish, traders should remember that the bear market is a buying opportunity ahead of another surge.
