As the current crypto bear market continues to deepen, Bitcoin is down 78% and Ethereum is down 82%. But elsewhere in the crypto market, many altcoins have fallen by the same amount 96% or more.
In a recent video, Elliott Wave International Currency & Crypto Analyst Jason Soni sheds some light on why this is happening and what it could mean for various cryptocurrencies.
Breaking down why some crypto assets crash more than others
Bitcoin price is down more than 78% from its all-time highs of 2021. Ethereum, the second-largest cryptocurrency by market capitalization, has seen a decline of about 82% from peak to trough so far.
As you move down the ranks of cryptocurrencies, the overall withdrawal numbers get deeper. For example, Cardano suffered a 92% collapse compared to the top two cryptocurrencies. Solana, once pinned to disrupt Ethereum, fell with one stunning 96%.
In a new video titled “Looking at Opportunities for the Next Crypto Bull Market,” Elliott Wave International Currency & Crypto Analyst Jason Soni addresses why – theoretically – this discrepancy exists.
According to Soni, newer altcoins will see the deepest retracement in their first cycle. As cryptocurrencies mature and go through more boom and bust cycles, retracements are less steep, as we’ve seen with Bitcoin and Ethereum.
ETH 2018 versus ADA 2022 | ETHUSD on TradingView.com
Bitcoin sets the standard for bear market corrections
In the video, Jason Soni used a comparison between many newer altcoins today, which follow a similar trajectory and total decline as Ethereum in 2018. With each new cycle, new participants join and liquidity in each asset increases, increasing volatility in decreases over time and less and less is absorbed in terms of maximum absorption.
This is perhaps most visible with Bitcoin. After Bitcoin’s first major bull market, the first-ever crypto asset fell 96%. In crypto’s second-ever bear market, BTC fell 86%. During the 2018 bear market, Bitcoin fell by a total of 84%. A softer landing may still be possible during this bear market.
Given the severity of the withdrawals in most cryptocurrencies and the extremely negative sentiment, this could mean that the end of the bear market is near. At this point, Soni recommends avoiding “social media sentiment” at all costs and says instead to “focus on the patterns.”
The video, “Looking at Opportunities for the Next Crypto Bull Market”, is offered exclusively through Elliott Wave International’s The crypto trader’s classroomwho delivers three new in-depth lessons every week from top Elliott Wave analysts. Many tutorial videos contain specific crypto charts and trade setups, using the Elliott Wave theory. You can learn more about Elliott Wave International’s Crypto Trader’s Classroom by clicking here.