decrypt.co
The crypto market's euphoria over cooling inflation lasted exactly one day—Dogecoin (DOGE), Solana (SOL), Cardano (ADA), and other major altcoins are now bleeding red as traders abandon the coins for the relative safety of Bitcoin.
Dogecoin dropped by 5.8% to $0.19, while Tron (TRX) fell 6.8% to $0.2717 and ADA declined 5.1% in the last 24 hours.
Other top altcoins joined the retreat, with Avalanche (AVAX) down 5.4% to $20.83, Sui (SUI) falling 5.6% to $3.27, and Chainlink (LINK) dropping 6.7% to $14.15.
Solana (SOL), despite recent gains, declined 3.9% to $157.89, while XRP shed 3.7% to trade at $2.23, according to CoinGecko data.
The drop tells a different story for Bitcoin (BTC) and Ethereum (ETH), which weathered the storm with comparatively mild losses of 2% and 1.5% respectively over the past 24 hours.
A “routine” correction?
Market experts suggest the selloff represents a natural correction following recent gains rather than a fundamental shift in sentiment.
"While it may seem surprising at first glance that altcoins have taken a hit amid generally positive market sentiment, I wouldn't call these moves unexpected or particularly dramatic," Dr. Kirill Kretov, Senior Automation Expert at CoinPanel, told Decrypt.
Kretov noted that altcoins remain "riskier than Bitcoin and Ethereum," pointing out how the "sub-5% price movements are noise,” and how “swings up to 10% should be viewed as routine."
Tracy Jin, COO of MEXC, attributed the decline to profit-taking behavior while speaking to Decrypt, explaining that "many traders are taking profits, especially in projects with high volatility."
Jin also pointed to macroeconomic factors, citing "the strengthening of the US dollar and the growth of government bond yields, which traditionally reduce the attractiveness of risky assets."
The correction comes despite yesterday's positive market reaction to inflation data, when Bitcoin gained ground after the May Consumer Price Index showed prices rose 2.4%, lower than all 73 forecasters predicted in a Bloomberg survey.
That data had initially boosted both Bitcoin and major altcoins, with ETH and SOL posting 1% and 1.7% gains respectively in the hour following the report.
Dogecoin entering “medium-term decline”
Paul Howard, Senior Director at Wincent, told Decrypt that the current movement is within normal trading ranges for “the 'Made in USA' basket” coins, noting the decline is "within a +/-5% daily range that crypto traders experience most days."
However, he noted specific concerns about Dogecoin, suggesting it is "likely entering a period of medium-term decline following the public spat between its proponent backer Elon [Musk] and President Trump."
Despite the current weakness, analysts remain cautiously optimistic about the medium-term outlook.
"If Bitcoin stays above $100,000 and institutional inflows continue, we can expect interest in altcoins to return soon," Jin said, describing the market as being in a "short-term overload phase" that could become "the starting point for the next growth impulse."