Altcoins continued their downward trend on Saturday, raising concerns about whether the crypto bull run has ended. Most altcoins crashed, with the Pi Network price falling by over 11%, and Pudgy Penguins, Bonk, Kaspa, Floki, and Ethena falling by double digits from their weekly high.
This article explains the three main reasons why the altcoin crash is happening and whether this is the end of the crypto bull run.
Why the Altcoin Crash Happened
Altcoins like Pi Network, Bonk, and Pudgy Penguins plunged because of the Bitcoin price action. After breaking out above $90,000 late last month, Bitcoin has struggled to move above the resistance at $105,000 and retest its all-time high as some analysts were expecting.
Bitcoin’s price has even dropped and retested the support at $102,000. Altcoins typically track Bitcoin’s performance, rising when it surges and falling during its downtrends.
Altcoins crashed because of profit-taking among retail traders since many of them had increased by double or even triple digits from their lowest levels earlier this year. For example, tokens like Pudgy Penguins, Fartcoin, and Dogwifhat jumped by over 100% from their April lows, while the market cap of all Solana meme coins moved from $6 billion to $15 billion.
Furthermore, these coins crashed following the latest Coinbase hack, in which fraudsters bribed employees for customer data. Although no money was stolen, the company warned that the hack may eventually cost it over $400 million.
Altcoins have also plunged because of the ongoing macro risks. Moody’s has downgraded the US credit rating, and tariffs are an issue. Walmart, the biggest retailer in the US, has already warned that it will hike prices soon. All this means that the Fed may not cut rates soon as requested by Donald Trump.
Is the Crypto Bull Run Over?
While it is hard to predict, chances are that the crypto bull run is not over as Bitcoin’s fundamentals remain strong. Bitcoin demand continues rising, with ETF inflows surging and companies like MicroStrategy and Semler Scientific continuing their purchases.
Bitcoin’s supply is falling in centralized exchanges and the over-the-counter market. In economics 101, rising demand and falling supply always leads to higher prices.
On top of this, as we wrote on Friday, the Bitcoin price formed a cup and handle pattern and a bullish pennant, pointing to an eventual surge to a record high. If this happens, other altcoins will also resume their strong bull run.
