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Altcoins experienced a notable pullback as the crypto market entered a “cooling off period” following recent overbought signals, with Hedera and Hyperliquid leading the declines among the top 20 cryptocurrencies.
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Ethereum, Dogecoin, and other major altcoins also retraced after a surge driven by President Trump’s signing of landmark stablecoin legislation, signaling a healthy market correction rather than weakness.
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According to COINOTAG sources, analysts emphasize that these corrections are typical profit-taking phases that help strengthen the market’s foundation for potential sustained rallies.
Altcoins cool off after recent highs as Hedera and Hyperliquid lead losses; market correction seen as healthy profit-taking amid regulatory and technical shifts.
Altcoin Market Correction Highlights Hedera and Hyperliquid Losses Amid Regulatory Developments
The cryptocurrency market witnessed a significant retracement among altcoins, with Hedera (HBAR) dropping 5.2% and Hyperliquid (HYPE) falling 5.1% within 24 hours, according to CoinGecko data. This pullback follows a period of strong gains fueled by renewed institutional interest and recent regulatory milestones, including the signing of the GENIUS Act, the United States’ first comprehensive stablecoin regulatory framework. Ethereum (ETH), Chainlink (LINK), and Dogecoin (DOGE) also experienced declines, reflecting a broader market adjustment after euphoric highs. Market analysts interpret this as a natural and healthy correction phase, essential for consolidating gains and preventing unsustainable price surges.
Technical Indicators and Analyst Insights on Market Momentum
Illia Otychenko, Lead Analyst at CEX.IO, describes the current pullback as a “healthy correction” following double-digit rallies. He highlights that momentum indicators such as the Relative Strength Index (RSI) have signaled overbought conditions, prompting short-term profit-taking. Importantly, Otychenko notes that these corrections do not indicate market weakness but rather serve to solidify the foundation for future growth. Supporting this view, XRP’s recent formation of a “Golden Cross” pattern and Ethereum’s declining selling pressure are cited as bullish technical signals that may underpin a sustained rally.
XRP’s Momentum and Support Levels Amid Market Retracement
Arthur Azizov, founder of B2 Ventures, points out XRP’s exceptional momentum prior to the recent pullback, noting the absence of any minor corrections during its ascent to an all-time high above $3.41. Azizov suggests that a correction to around $2.64 would align with strong support levels and be a natural market response. He emphasizes that maintaining a price above $1.90 is critical for preserving the overall bullish trend. This perspective underscores the importance of technical support zones in managing investor expectations and guiding trading strategies during volatile periods.
Bitcoin’s Resilience and Market Dynamics Post-Legislation
While altcoins retraced, Bitcoin demonstrated relative resilience, gaining approximately 1% to surpass $119,000 after retreating from a recent peak of $123,000. Market experts attribute this to a “natural pause” following the excitement generated by the GENIUS Act’s enactment. Shawn Young, Chief Analyst at MEXC, describes the current phase as a “hangover” from the euphoria rather than a structural market shift. He highlights that altcoin open interest is nearing Bitcoin’s levels, a dynamic historically associated with corrections due to aggressive positioning. Additionally, Young notes a shift in spot selling pressure from Binance to Coinbase, signaling increased risk aversion amid uncertain market conditions.
Federal Reserve Influence and Market Sentiment Ahead of Key Address
The ongoing correction is compounded by heightened focus on Federal Reserve Chair Jerome Powell, who is scheduled to deliver his final public address on banking regulation before entering a 10-day blackout period. Market participants are closely watching for cues on the pace of interest rate adjustments, with current expectations pricing in two rate cuts this year. Powell’s tone is anticipated to significantly influence risk sentiment across both crypto and traditional markets. Shawn Young emphasizes that, given the slowing news cycle and Powell’s prominence, effective risk management has become essential for investors navigating this period.
Political Developments and Their Potential Impact on Crypto Markets
Adding complexity to the macroeconomic landscape, reports have emerged that President Trump drafted a resignation letter for the Fed chair last week, fueling speculation about potential leadership changes aimed at accelerating rate cuts. Such moves could have significant implications for risk assets like Bitcoin, which typically benefit from looser monetary policy. While these developments remain speculative, they contribute to the cautious sentiment permeating the market and underscore the importance of monitoring regulatory and political factors alongside technical analysis.
Conclusion
The recent altcoin pullback, led by Hedera and Hyperliquid, reflects a broader market correction following a period of strong gains driven by regulatory milestones and institutional interest. Analysts agree that this phase represents healthy profit-taking rather than a loss of confidence, with technical indicators suggesting a foundation for potential renewed rallies. Bitcoin’s resilience and the evolving regulatory environment, particularly the Federal Reserve’s forthcoming communications, will be critical factors shaping market dynamics in the near term. Investors are advised to prioritize risk management and remain attentive to both technical signals and macroeconomic developments as the crypto landscape continues to evolve.
