Ethereum's 20% Drop Could Mark Last Correction Before Bull Run - Analyst

The cryptocurrency market, currently in the throes of a widespread downturn, has seen altcoins encounter formidable challenges, with Ethereum ( ETH ) notably enduring losses approaching 20%. This downturn follows Ethereum's persistent inability to breach the critical $4,000 resistance level, a threshold that in recent months has thwarted its ascent to new heights, akin to Bitcoin's ( BTC ) performance as it concluded 2024.

Despite this, some experts, including market analyst Ash Crypto, have observed what they describe as a "mid-cycle correction" in the altcoin sphere.

This phase, considered a natural element of the bull market cycle, might pave the way for a resurgence in value previously lost, potentially even leading to unprecedented gains for these digital assets.

In a recent social media post on X, Ash Crypto pointed to historical patterns, reminiscent of price behaviors observed in January 2021. This period heralded the start of an altcoin season that captured investor interest.

Though recent market volatility persists, Ethereum and other altcoins have begun to show modest recovery signals. ETH, in particular, has climbed above $3,200, bouncing back from a support level of $3,100. This upward movement curbed further losses and rekindled trader optimism. Nonetheless, Ash Crypto advises caution, signaling the possibility of another decline before a more robust recovery is established.

Ash Crypto forecasts that altcoins might undergo an additional market correction before transitioning into what he anticipates will be a full-blown bull phase later this year.

This prediction is based on his analysis of a chart illustrating the total market capitalization of altcoins, excluding Bitcoin and Ethereum, which suggests potential consolidation between $926 billion and $930 billion. Such a phase might be a precursor to a bullish cycle peak, potentially reaching $3.39 trillion.

Fueling further speculation, Ash Crypto noted Bitcoin's dominance appearing to have peaked, hinting that an altcoin season could be forthcoming. Nevertheless, he cautions that preceding such a surge, market whales might attempt to unsettle retail investors through price manipulations.

As of this writing, Ethereum's price is $3,215, reflecting a 3% increase within the past 24 hours. Other altcoins, such as XRP , Solana ( SOL ), and Cardano ( ADA ), have also experienced rises of 5%, 3%, and 5.3%, respectively, over the same period.

Considering Ash Crypto's insights, it remains uncertain whether further consolidation or another downturn will occur before potential historic gains materialize for these digital assets.