According to Coinpedia, the current market euphoria signal has the potential to be the beginning of a major downward cycle.
Based on previous patterns, altseason could indeed start around June or July, marked by a spike in meme coins, Layer-2 projects, and the NFT sector.
However, this trend is considered high risk because retail investors often enter when prices are at their peak.
An on-chain analyst warns that most altcoins could lose up to 99% of their value by 2026. He advises investors to fully exit the crypto market by August 2025, before a major correction occurs.
Solving Problem:Use Three Key Indicators This prediction is based on three on-chain indicators that previously successfully detected market tops in 2017 and 2021, namely:
1. MVRV (Market Value to Realized Value).
2. NUPL (Net Unrealized Profit/Loss).
3. SOPR (Spent Output Profit Ratio).
All three gave red signals several weeks before the market experienced major corrections in the previous two cycles.
The analyst believes that a similar trend has the potential to occur next year, especially if euphoric sentiment continues to increase.
The following popular visual among traders illustrates the psychology of market cycles. Based on the chart, the current market position is estimated to have entered the belief phase towards thrill, a phase that often indicates that the peak of a bullish trend is near.
The surge in memecoin prices, Layer-2 projects, and the rise of NFTs can trigger excessive optimism.
However, if you follow historical patterns, this phase is often preceded by a major correction that drags the majority of altcoins to their lowest point.
Many investors believe that altseason will provide high profit opportunities through tokens that increase drastically.
However, analysts warn that this pattern can actually be a "market bait" that triggers FOMO and makes retail investors trapped at the peak of the price. Instead of waiting for the peak of altseason, analysts recommend a gradual exit while the market is still bullish. Funds should be moved to more stable assets, such as stablecoins, yield-generating assets, and RWA (real-world assets).
He also suggests a capital security strategy through wallet separation: Use a cold wallet to store primary assets. Use a burner wallet for speculative assets such as airdrops or high-risk tokens.
According to him, one of the main causes of major losses is mixing primary capital with high-risk exposure in one wallet that is not separated.
In the 2017 and 2021 cycles, altseasons were usually driven by loose monetary conditions and increased liquidity.
But now, without central bank interest rate cuts, global liquidity remains limited, so interest in speculative assets such as altcoins has not increased significantly.
*Disclaimer :
The Analyses expressed on Umetonews are for informational purposes online.
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