Why Altcoins Are Struggling Despite Bitcoin and Ethereum's Strong Performance

While Bitcoin (BTC) and Ethereum (ETH) are trading near yearly highs, altcoins have experienced a brutal correction, losing 40% to 70% of their value in recent months. This decline is attributed to several factors, including:

• Constant supply dilution: Many altcoins have scheduled token unlocks and distributions over the years, leading to an increasing supply of tokens. This constant dilution puts downward pressure on prices. Arbitrum (ARB) and Solana (SOL) are examples of altcoins with large upcoming token unlocks.
• Selling pressure from venture funds: Venture capital funds, which invested heavily in crypto projects during the bull market, are now under pressure to realize profits. This selling pressure further exacerbates the decline in altcoin prices.
• Lack of fresh inflows: Liquidity inflows into the crypto market have stalled, leading to a decrease in demand for altcoins. This is particularly problematic for new tokens and airdrop programs.
• Seasonal trends: June is historically a weak month for altcoins. The combined market cap of all crypto assets excluding BTC and ETH (TOTAL.3) has declined every June for the past six years.

This confluence of factors has resulted in a significant downturn for the altcoin market, with sentiment in crypto social media circles resembling bear market despair.