Ethereum (ETH) nearly hit the $5,000 mark last weekend before tumbling back down in a matter of hours.
Traders called it a flash crash. And the easy takeaway from this event is that crypto remains volatile.
But I believe it points to something much more important.
In fact, what happened this past weekend could be the clearest sign yet that altcoins are entering a new phase of adoption.
Here’s why…
A Sell-Off With a Silver Lining
The drop itself was brutal. But I’m convinced it wasn’t the start of a lasting downturn.
How can I be so confident?
Because it was triggered by a single whale that dumped roughly 24,000 bitcoin (BTC) — worth about $2.7 billion — late Sunday to convert to Ether.
This set off a chain reaction, forcing liquidations in both bitcoin and Ethereum futures.
Within minutes, BTC shed nearly $3,000 and ETH fell back below $4,700. Meanwhile, more than $800 million in leveraged positions across the market disappeared.
But anyone who’s been around crypto long enough knows that this is all part of the game.
Thin weekend liquidity leaves the market exposed to large trades. Liquidations pile on top of each other, and prices look like they’re falling off a cliff.
By Monday morning the panic had already faded.
And as of this morning, ETH is hovering around $4,600 with momentum pointing the right way.
Source: Coingecko
That’s why I’m not losing sleep over the fact that this crash happened.
What’s much more important to me is that Ethereum was testing $5,000 in the first place.
Remember, just two years ago ETH traded closer to $1,000. But despite last weekend’s crash, it’s consolidating within striking distance of a record.
This proves to me that the market isn’t on shaky ground. Instead, this is the behavior of a market where long-term conviction is building.
And the data backs me up.
Data from Ethereum wallets shows that long-term holders are now sitting on healthy profits.
This historically marks the beginning of what’s known as the “belief zone.” It’s the stage in a crypto cycle where short-term speculators have been shaken out, conviction grows stronger and institutional money starts to anchor the market.
And it’s often the foundation for a sustained rally.
But Ethereum isn’t alone in this conviction.
Consider bitcoin, which is seeing institutional involvement continue to grow.
Over 150 public companies now hold nearly a million BTC. With only 15% of bitcoin still sitting on exchanges, all that stockpiling could make the supply much tighter — and much more valuable — in the months ahead.
And an even bigger story of the past few months is how altcoins are showing signs of real strength.
Solana (SOL) in particular just got its biggest vote of confidence yet.
Three heavyweight firms — Galaxy Digital, Jump Crypto and Multicoin Capital — are working with Cantor Fitzgerald to raise a $1 billion fund dedicated entirely to Solana. And the Solana Foundation itself is backing this effort.
This would be the largest treasury ever assembled for a non-Bitcoin blockchain.
Now, think about what this means for Solana…
Because these firms aren’t chasing a short-term flip. This is a long-term play to fund Solana’s development and adoption.
They clearly see it as a platform with the potential to compete directly with Ethereum in payments, finance and Web3 applications.
At the same time, crypto is showing that it can be useful in the real world.
Gemini, in partnership with Ripple (XRP) and Mastercard, just launched a branded credit card in the U.S. that offers cashback in XRP.
Image: CoinDesk
Now, I’m not saying this is a huge deal. But it’s a move that brings crypto directly into everyday consumer spending.
And these things add up.
When I consider the state of crypto, here’s what last weekend’s flash crash tells me…
On the one hand, whales can still shake markets in the short term. On the other hand, you have institutional money pouring into crypto and strengthening Ethereum and Solana.
One is noise. The other is a signal.
Unfortunately, a lot of investors get distracted by noise. We’re tempted to focus on corrections because scary headlines grab eyeballs.
But the lesson of prior cycles is that these violent shakeouts often mark a turning point. They flush out speculators, reset expectations and leave the market healthier for its next move higher.
When that happens, we’ve seen altcoins make phenomenal gains.
Of course, that doesn’t mean every altcoin is about to thrive.
Far from it…
Here’s My Take
The weekend flash crash reminded everyone that crypto can still be volatile. But underneath the turbulence, the foundations for something bigger are being poured.
I believe the reversal at $5,000 wasn’t the end of Ethereum’s rally…
It was the beginning.
And what’s even more exciting is that it means certain altcoins are positioned for a new breakout.
In mere days, President Trump will sign groundbreaking legislation that will transform cryptocurrency markets.
And you still have time to get in before he puts pen to paper.
Now, many tokens won’t recover from their last cycle’s hype. But I’ve uncovered three under-the-radar cryptos that could deliver staggering returns starting before September 1.
I’m talking about gains as high as 20X this year, or 100X by 2030.
However, you do NOT have much time to act.
I am holding open a special presentation with all the details about Trump’s historic move.
Before time runs out.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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