Altcoins face capitulation test as 24% hit $97K lows

Nearly a quarter of the top 200 cryptocurrencies have dropped to their lowest price levels in over a year, raising concerns among analysts about potential market capitulation and a possible future rebound.

Data from Jamie Coutts, chief crypto analyst at Real Vision, reveals that "The Feb 7 washout pushed 24% of the Top 200 to 365-day lows," marking the highest level since August 5, 2024.

According to Juan Pellicer, a senior research analyst at IntoTheBlock, the ongoing market correction signals possible capitulation.

Pellicer notes that significant liquidations and a $3.13 trillion drop in total crypto market cap suggest "overleveraged positions are flushed out."

In financial terms, capitulation occurs when investors panic and sell off their holdings.

This leads to a major price decline that indicates the market is about to bottom out and begin a new uptrend.

Pellicer suggests the present downtrend might be a temporary correction for the majority of tokens.

He also mentioned AI valuations, which could continue the bull market.

Some industry observers are worried about the broader effects of the current memecoin craze among retail investors on the cryptocurrency market.

"The rise of memecoins promoted by high-profile individuals has distorted capital flows, siphoning liquidity away from more established projects," noted Edwin Mata, co-founder and CEO of Brickken.

Despite the general downtrend, experts suggest that investment opportunities remain.

CoinDCX reports that Bitcoin (BTC) is trading at $101,805.34, and Ethereum (CRYPTO:ETH), Binance Coin (CRYPTO:BNB), Dogecoin (CRYPTO:DOGE), and Algorand (CRYPTO:ALGO) show great potential.