Altcoin Capitalization Primed for a Recovery
The altcoin capitalization, which represents the total crypto market capitalization excluding Bitcoin, is currently 70% below its all-time high set in November 2021. However, there are signs of a bullish pattern developing on the long-term chart, suggesting the possibility of a strong uptrend.
If this pattern plays out, it could lead to a recovery in the altcoin market in the coming weeks and months. While there are key resistance levels that need to be overcome, the target remains the previous all-time high from the previous bull market.
Altcoin Capitalization Breaks Out of Falling Wedge
The altcoin capitalization reached its peak in November 2021 at $1.71 trillion but has been in a downtrend since then. However, the chart now appears to have reached the bottom of its current cycle in June 2022.
Since the beginning of 2023, a bullish structure has formed on the chart, with higher highs and higher lows relative to previous levels. Additionally, a falling wedge pattern has emerged on the weekly chart, indicating a potential trend reversal.
The breakout target from the falling wedge pattern is the previous all-time high at $1.71 trillion. While a higher high has already been formed, altcoin capitalization needs to maintain support above the resistance-turned-support line and the $494 billion level for the uptrend to continue.
Declining ALTCAP Volume Suggests Impending Volatility
The daily chart also supports the bullish outlook for altcoin capitalization. However, there are key resistance levels at $543 billion, $608 billion, and $657 billion that need to be surpassed for a confirmed bullish trend.
On the other hand, the $494 billion area serves as crucial support. A loss of this level could lead to a retest of the late 2022 bottom at $437 billion.
The trading volume signature and RSI provide additional insights. The declining volume since March 2023 indicates a compression of the trading range, signaling an impending increase in volatility.
The RSI is giving moderately bullish readings, with a potential crossover above the 50 level confirming the continuation of the uptrend.
Hot Take: Altcoin Capitalization Poised for a Rebound
The altcoin market has experienced a significant decline from its all-time high, but there are positive signs indicating a potential recovery. The formation of a bullish pattern on the long-term chart and the breakout from a falling wedge pattern suggest that an uptrend could be on the horizon.
However, there are key resistance levels that need to be overcome for the altcoin capitalization to reach its previous all-time high. Additionally, maintaining support at crucial levels is essential for sustaining the upward momentum.
With declining volume and a moderately bullish RSI, there is potential for increased volatility and continued price appreciation in the altcoin market. Keep an eye on these key indicators as they could provide valuable insights into the future direction of altcoin capitalization.
By
By
By
