Benzinga - by Bibhu Pattnaik, Benzinga Staff Writer.
The crypto analyst known for accurately predicting the end of Bitcoin's (CRYPTO: BTC) bull market in 2021 has shared insights into the recent downturn in the altcoin market.
On Friday, pseudonymous crypto strategist Pentoshi shared his view on X, formerly known as Twitter, that the recent altcoin crash can be attributed to simple supply and demand dynamics combined with a loss of momentum.
Pentoshi explained that the frequent launch of new altcoins diluted demand. This saturation led to a scenario where around $200 million a day in new money inflows was necessary to sustain current prices.
Eventually, supply outpaced demand, leading to sharp declines in the market, he said.
"We got to the point where there were a lot of new coins launching daily and each one needed more and more liquidity to support it. At one point, it needed around $200 million a day of new money inflows to support current prices," Pentoshi said in a post highlighting the imbalance that precipitated the crash.
I always relate markets to sports or a gameWhy bc you play both offense and defense and there are huge momentum shifts
At times you can feel the momentum waning and at this point momentum swings the other way. Even if only temprorary
So what happened here? I think for the… pic.twitter.com/RLnLMpjDKy
— Pentoshi