Over the past weekend, it seems that the altcoin market underwent a necessary correction. The significant drop in value for most altcoins may be attributed to escalating conflicts in the Middle East, leading to increased volatility. Nevertheless, the crypto market is currently bouncing back, and assuming no unforeseen crises, a substantial bull run could follow.
Recovery in process
The crypto market’s surge could be regaining strength. Over the weekend, Bitcoin suffered a significant setback with a 17.5% decrease, pulling its price below $60,000. However, since then, both Bitcoin and the broader cryptocurrency market have shown early signs of bouncing back on Sunday and Monday.
A bleak weekend
In the world of altcoins, patterns are beginning to emerge. The previous Friday and Saturday saw a discouraging turn of events. Geopolitical turmoil in the Middle East caused ripples throughout the cryptocurrency market, with altcoins feeling the brunt of the instability due to their higher risk classification.
Starting on Friday, the value of the altcoin market cap decreased by approximately 14.4% based on its opening price. This downward trend continued into Saturday, causing a drop of around 16%. However, later in the day on Saturday, buyers stepped in and raised the price significantly, leaving a long tail or “wick” beneath the large red candle.
Total 3 market cap trend is smashed to the downside
The chart above illustrates the significant shift in the Total 3 (the sum of all altcoin markets caps excluding Bitcoin and Ethereum) as depicted in the Total 3 line. This trend was disrupted drastically by the dip, but the resilience of altcoins is evident as their market caps have bounced back to reach the trend line once more.
Bearish confirmation?
The current price level might be interpreted as a bearish sign because it has hit a previous support level that is now acting as strong resistance. If this resistance holds, the downward trend may continue. However, if the price manages to rise above the trend line again, then resistance could potentially turn into support.
Bullish cup and handle
Looking at the bigger picture of the past week, the market shows signs of improvement. The price has held steady at $645 billion and managed to climb back above the trend line. Bulls are hoping for a continuation of this upward trend towards the resistance level of $786 billion. An exciting development is the potential formation of a “cup and handle” pattern. This pattern, which indicates a strong bull market, consists of a deep dip (the “cup”) followed by a shallow uptrend (the “handle”). If the price reaches $786 billion again, it would only need to break and confirm the resistance level for this pattern to develop fully. The target price for completion of this pattern is an impressive $1.285 trillion. Buckle up!
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2024-04-15 14:04