The altcoin market is pulling back from its recent highs, and a top analyst believes the reason is hiding in an unexpected place: the gold market. According to Michaël van de Poppe, a powerful breakout in the price of gold could be signaling a short-term capital rotation away from risk-on assets like crypto.
The altcoin market is pulling back from its recent highs, and a top analyst believes the reason is hiding in an unexpected place: the gold market. According to Michaël van de Poppe, a powerful breakout in the price of gold could be signaling a short-term capital rotation away from risk-on assets like crypto.
This surge in Gold’s price coincided with a slowdown across the altcoin market, which saw most top tokens consolidate. Some altcoin prices have even declined slightly as bulls work to prevent a deeper breakdown.
Gold broke above crucial resistance at $3,365, dampening a surging appetite for risk-on assets.
As one user noted in response to Van de Poppe’s post on X stated that Gold’s breakout appears as a warning shot for investors in risk-on assets, like cryptocurrency.
According to the respondent, risk-on assets usually “exhale” whenever capital shifts back to safety. However, he noted that the correction in the altcoin market could be another capital rotation before the next melt-up.
This shift in sentiment is visible on the charts. Ethereum slowed down after reaching $3,860, marking a yearly high for the flagship altcoin amid a surging crypto market. Other top altcoins, including XRP, ADA, and SOL, followed a similar trajectory, with XRP trading 5.24% below its recent high at the time of writing.
Meanwhile, ADA and SOL retraced 6.33% and 2.71% respectively.
The latest altcoin market pullback has caused the altcoin market cap to decline from $1.56 trillion to $1.51 trillion. It is worth noting that the crypto market could retrace lower based on the crypto analyst’s projection.
According to the analyst, that could happen if Gold heads for a new all-time high. However, he considers such a potential retracement a temporary development, considering the existing bullish momentum in the crypto market.
