Altcoin Sherpa, a well-known crypto strategist, is cautioning investors about the altcoin market, specifically mentioning Chainlink (LINK) as it experiences a correction. With a significant following of 214,900 followers on the social media platform X, Altcoin Sherpa suggests that most altcoins may enter a consolidation phase lasting several months. According to the analyst, while there may be outliers, the majority of altcoins need time to stabilize after a period of substantial growth.
As an example, Altcoin Sherpa points to Chainlink, a provider of decentralized oracle services for smart contracts. The analyst notes that LINK is currently undergoing a correction after experiencing a 4x increase in value following a long accumulation phase. Altcoin Sherpa finds it alarming that many altcoins, including LINK, did not experience such significant gains in recent months, despite being in an accumulation phase for over 500 days.
At the time of writing, LINK is trading at $13.21, reflecting a decline of over 1% in the past 24 hours.
Looking ahead, the analyst predicts that only specific sectors of the crypto market will perform well in the coming months. Established projects like Ethereum (ETH) and Solana (SOL) are expected to demonstrate strength, along with projects related to artificial intelligence (AI), memecoins, and newer projects like Ethena (ENA) and Wormhole (W). Ethena is a governance token launched by Ethena Labs for its decentralized finance protocol, while Wormhole is a cross-chain messaging protocol.
Altcoin Sherpa emphasizes that liquidity in the market is currently fragmented, with only a few sectors experiencing significant growth. The analyst highlights the following sectors of focus:
1. Memes: This sector is expected to perform well due to its inherent appeal.
2. Move to real value: With so many low-quality assets in the market, Altcoin Sherpa believes that more stable assets like ETH and SOL will stand out.
3. Big token launches: Projects like ENA, which have ample funding and strong marketing efforts, are likely to gain attention. Additionally, Altcoin Sherpa believes that coins like W, which have underperformed thus far, will thrive once Bitcoin stabilizes. Market makers are expected to drive up the value of these coins.
4. AI: This sector is expected to see growth due to its relevance and importance in the market.
At the time of writing, ENA is trading at $0.9311, while W is priced at $0.5697.
In conclusion, Altcoin Sherpa advises investors to be cautious and conduct thorough research before making high-risk investments in Bitcoin, cryptocurrencies, or digital assets. The analyst emphasizes that transfers and trades are done at one’s own risk, and any losses incurred are the responsibility of the investor. The Daily Hodl, where this information is sourced, does not provide investment advice and is not an investment advisor.
