A prominent crypto strategist is sounding the alarm on the altcoin market, particularly in light of corrections seen in projects like Chainlink (LINK).
Altcoin Sherpa, a pseudonymous analyst with a sizable following on the social media platform X, is cautioning his 214,900 followers that many altcoins could be entering a prolonged consolidation phase in the coming months.
According to Altcoin Sherpa, “It’s quite possible that altcoins are done for the next one to four months. There are certainly going to be outliers, but I think that the majority need time to chill out and consolidate after such a big run.”
Using Chainlink as an example, a decentralized oracle services provider for smart contracts, Altcoin Sherpa notes that LINK is currently undergoing a correction following significant gains after a lengthy accumulation phase.
He adds, “The scary thing is that many alts didn’t even run that hard over the last few months. Look at coins like LINK. 500-plus days in accumulation and only a 3x-4x gain (depending on where you got in) and now the price is strongly pulling back.”
As of the latest update, LINK is trading at $13.21, down more than 1% in the last 24 hours.
Looking ahead, the analyst anticipates that only specific sectors of the crypto market will thrive, highlighting established projects such as Ethereum (ETH) and Solana (SOL).
Additionally, he expects strength from areas like artificial intelligence (AI) related projects, memecoins, and newer projects like Ethena (ENA) and Wormhole (W), emphasizing their potential for growth.
“We now have very fragmented liquidity where only a few sectors are pumping… I think other normal coins will also get some attention too but the sectors I’m mostly focusing on are: Memes, Move to real value (e.g., ETH, SOL), Big token launches (e.g., ENA), and AI,” the analyst states.
As of the latest data, ENA is trading at $0.9311, while W is at $0.5697. These insights from Altcoin Sherpa shed light on the current state of the altcoin market and offer valuable guidance for navigating the evolving landscape of crypto investments.
