Warning Signs in the Altcoin Market: Tokens Experience a Steep 40% Decline

 Amidst the bearish trend impacting the altcoin market as the new year unfolds, a crypto analyst named VIKTOR has discerned a noteworthy pattern in the downward trajectory of specific tokens within a particular category.

In a recent tweet, VIKTOR shared some thoughts on the market turbulence that occurred on January 3, humorously calling it "liquidation day." VIKTOR pointed out that while most altcoins saw a big drop of around 30%, there was a specific trend among certain tokens that suffered even bigger losses. Notably, well-known coins like BIGTIME, Pyth Network (PYTH), MEME, TOKEN, Worldcoin (WLD), and Jito (JTO) showed significant drops of over 40%. VIKTOR's observation suggested that these tokens were more sensitive to big market swings, as seen in their steeper declines on liquidation day. When asked to explain the reasons behind the observed sell-off, the analyst suggested that short-term holders might be looking to make quick profits from these tokens.

Moreover, VIKTOR highlighted that the absence of a substantial price history for these new coins could also be a contributing factor. Market participants lack a clear reference point or fair value for these assets.

In addition, another user named X pointed out a peculiar characteristic shared among the tokens BIGTIME, PYTH, MEME, TOKEN, WLD, and JTO. The commenter asserted that these tokens have a more significant presence in perpetual contracts compared to spot holders.

This observation aims to emphasize that a substantial portion of the trading activities for these tokens is concentrated among market participants speculating on their price movements, rather than those who actually own the assets.