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FollowingEvery time the “Ico Season” arrives, ICO tokens usually experience a significant decline first, causing many investors to worry. Now, cryptocurrency analysts have discovered an interesting historical pattern: before ICO tokens start to soar, the market often experiences a sharp drop first. This means that another ICO season may be approaching soon, providing investors with an opportunity to observe and plan accordingly.
Cryptocurrency analysts believe that the massive margin calls that occurred over the weekend, resulting in billions of dollars being lost in the crypto market, may have paved the way for “ICO Season 3.0”.
Analyst and researcher “Bull Theory” pointed out on Monday, “Every major expansion in the cryptocurrency sector is accompanied by adjustments of 30% to 60%.”
In March 2020, the pandemic caused the market to lose nearly 70% of its value. In May 2021, the market lost more than 50% of its value. During the last bull market cycle, there were at least five other declines, with ICO tokens dropping by 30% to 40%.
The market collapse in April this year made many people think that a bear market had begun. However, “Each such decline seems like the end, but every time there is a strong rebound during this cycle,” the analyst added.
During the last bull market, there were several instances of ICO market cleanups. Source: Bull Theory
ICO tokens will rebound
During these epic market resets, altcoins usually suffer the most severe losses. This was evident over the weekend, with the Ripple currency XRP falling by at least 18% in just one day. Solana (SOL) declined by 22%, Dogecoin (DOGE) by 28%, Cardano (ADA) by 25%, and Chainlink (LINK) by 26%. Analyst Ash Crypto said, “After the crash in March 2020, we experienced a massive altcoin boom, with prices rising by 25 to 100 times.” He added, “I believe this situation will happen again.” Meanwhile, analyst Merlijn The Trader identified a pattern similar to the “Altcoin Season 3.0” trend on the Bitcoin/altcoin chart. This pattern involves a crossover of the Moving Average Convergence Divergence (MACD indicator, which has occurred twice before—in 2017 and 2021). The chart pattern seems to be similar to those seen in previous cycles. Source: Merlijn The Trader
The total market value of cryptocurrencies once again fell below $4 trillion.
Although the market is optimistic about a potential altcoin boom, the total market value of cryptocurrencies still dropped below the $4 trillion mark on Tuesday.
On Tuesday morning, the price of Bitcoin fell below $111,500, marking a decline of 1.4% for the day. At the same time, some altcoins saw daily increases.
Additionally, the share of Bitcoin in the market—another key indicator of altcoin performance—dropped to 59% on Tuesday, marking the first positive week-on-week figure in five weeks.
