CryptoQuant’s Analyst Reveals How Exchange Inflows Could Trigger Altcoin Wave

According to insights from CryptoQuant analyst Axel Adler Jr., a notable consolidation in crypto assets may trigger an imminent altcoin boom.

This observation is based on a significant decline in the average monthly exchange inflow for altcoins, a metric that has historically correlated with periods of accumulation and subsequent price appreciation.

CryptoQuant Reveals Exchange Inflow Pattern

In a recent announcement via the social media platform X, Adler Jr. highlighted that the average monthly exchange inflow for altcoins has decreased by 36% from the prevailing annual average capital flow of $2.5 billion, noting that the average monthly revenue is now $1.6 billion.

This is $900 million less than the yearly average. Adler Jr. believes this slowdown in money movement indicates that people are consolidating their assets and preparing to buy more before the next significant surge in altcoins.

History shows this pattern is familiar. The last time money flowing into altcoins dropped below the usual amount was in late 2023. This was before altcoins experienced a significant increase in value from August to September 2024. Adler Jr. clearly states that every time money flowing into exchanges decreased, altcoin prices later increased significantly.

The basic financial idea behind this is to reduce sales. When less money is sent to crypto exchanges, it means less selling pressure in the market immediately. This suggests more investors are choosing to keep their assets rather than selling them on exchanges. This behavior often indicates that they expect prices to increase later.

Potential Altcoins Wave Trigger

CryptoQuant’s study suggests that when altcoin money flowing into exchanges stays below $1.6 billion, it has historically led to significant increases in altcoin prices. This means if the money flowing into exchanges drops further below this point, it could signal the start of the following “altcoin season.”

As less money flows into exchanges, it often shifts from quick trading to more extended holding periods, and sometimes moves to Bitcoin. However, this holding period frequently leads to a more decisive move later.

Moreover, once funds are held for a while, it tends to shift back into altcoins with more market power, marking the beginning of the second, often larger, part of the market cycle.

The information from CryptoQuant suggests that traders are entering a change period, which is a key moment right before the expected next altcoin cycle. A steady period of less money flowing into exchanges helps people gather assets, which is essential for future price increases.

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