It is interesting that we are above the levels of September, October, and November, while most shitcoins are far below those values.
This toxic impact comes from the uncontrolled inflation of new tokens, driven by endless unlocks and the emergence of new multi-million dollar projects.
Recent examples include the $4 billion “Trump” token and the $1 billion “Melani” token, along with “Pengu,” which also reached a billion-dollar valuation.
This creates a toxic inflationary effect: market capitalization remains bullish, the amount of money in circulation stays the same, but altcoins continue to decline.
Simply put: the size of the pie remains the same, but more people are trying to take a slice every day.
All of this has led to—or has already caused—a liquidity crisis, where the market is flooded with money, but the rate of market capitalization growth is significantly lower than the rate of inflation.
Additionally, the share of the pie belonging to altcoins is shrinking as more participants take a bite, while BTC’s share remains intact with only one “eater.”
Technical Analysis:
Despite the collapse, the decline is following a corrective structure. Based on the latest data, the possibility of the trend ending in a “wedge” formation remains on the table, leading to a final upward move.
