Are Altcoins Done? Trader Issues Alert Amid ‘Scary’ Behavior in Chainlink (LINK) and Others

A widely followed crypto strategist is warning about the altcoin market as projects like Chainlink ($LINK) correct.

Pseudonymous analyst Altcoin Sherpa tells his 214,900 followers on the social media platform X that most altcoins may enter a months-long consolidation phase.

“It’s quite possible that altcoins are done for the next one to four months. There are certainly going to be outliers, but I think that the majority need time to chill out and consolidate after such a big run.”

The analyst says that Chainlink, a provider of decentralized oracle services for smart contracts, is illustrative of other alts. $LINK is correcting after 4x gains following a lengthy accumulation phase, according to the analyst.

“The scary thing is that many alts didn’t even run that hard over the last few months. Look at coins like $LINK. 500-plus days in accumulation and only a 3x-4x gain (depending where you got in) and now price is strongly pulling back.”

$LINK is trading for $13.21 at time of writing, down more than 1% in the last 24 hours.

The analyst believes that in the months ahead only specific sectors of the crypto market will perform well, including well-established projects like Ethereum ($ETH) and Solana ($SOL).

He also expects strength from artificial intelligence (AI) related projects, memecoins and newer projects like Ethena ($ENA), a governance token launched by Ethena Labs for the project’s decentralized finance protocol, and cross-chain messaging protocol Wormhole (W).

“We now have very fragmented liquidity where only a few sectors are pumping…

I think other normal coins will also get some attention too but the sectors I’m mostly focusing on are:

1. Memes: obvious

2. Move to real value. With so much trash on the market, boring shit like $ETH, $SOL, etc. is probably going to just good.

3. Big token launches. Think stuff like $ENA. They have a ton of money behind it, lots of marketing, and have some real value. Although coins like W have performed poorly, I still think those do very well once BTC stabilizes. MMs (market makers) are going to send this thing higher.

4- AI: Obvious as well.”

At time of writing, $ENA is trading at the $0.9311 level while W is at $0.5697.