Crypto’s leading altcoins have fallen far from all-time highs notched last year, but their recent resilience indicates that downward pressure could be abating, according to Grayscale Head of Research Zach Pandl.
In a blog post published on Thursday, Pandl wrote that the crypto asset manager “can’t be sure that crypto markets have bottomed.” In an interview with Decrypt on Monday, however, he expressed positive sentiment toward the performance of altcoins amid geopolitical turmoil.
“Altcoins are trading remarkably well over the last month in the context of a challenging macro environment,” Pandl said, in reference to headwinds like the U.S.-Israel war with Iran and a significant drawdown in stocks. “The price action may be telling us that we found a more durable bottom. That remains to be seen, but I think [it’s still] very encouraging price action.”
The crypto industry’s leading altcoins, from Ethereum to Avalanche, have been hammered since the value of all cryptocurrencies tracked by CoinGecko peaked around $4.37 trillion in October. The global cryptocurrency market cap stood at $2.47 trillion on Monday, or 43% lower.
Despite the drawdown, Ethereum has risen 9.2% to $2,160 over the past month. Solana has edged down 1.9% to $82 over the same period. Chainlink, meanwhile, has risen 3.8% to $9.08. Still, there is broad consensus that the crypto market is mired in a bear market at this point.
Pandl wagered that some traders may want to wait for clearer catalysts for altcoin allocations. At the same time, he said investors with longer horizons may consider current levels. In recent months, industry onlookers have looked to the passage of the Clarity Act crypto market structure bill with hope.
Experts say the bill could drive the adoption of crypto on Wall Street through regulatory clarity. After months of tension over stablecoin rewards, Coinbase Chief Legal Officer Paul Grewal signaled last week that a resolution among lawmakers could be coming soon.
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“If you have some patience for some further range-bound markets and choppiness over the short term, these are potentially very compelling entry points,” Pandl added.
Slumping trading volumes for altcoins have tilted the market towards Bitcoin. Some analysts have attributed that shift to expectations of tighter monetary conditions and macro uncertainty.
From Grayscale’s perspective, there’s a striking disconnect between the valuations of some altcoins and the ongoing improvement in fundamentals, from regulatory clarity to the growing adoption of stablecoins and tokenization. In particular, Pandl said that Ethereum and Solana “stand to benefit significantly from those trends,” despite their recent slides.
