Break of support or another spike up?
Judging from the daily chart, it appears that Bitcoin ($BTC) may have reached its market top for this phase of the bull market. The price is currently holding above the channel and sitting on support. If BTC breaks these supports, it could indicate a bearish trend and a deeper correction. However, the trend remains unbroken for now, and there is a possibility that BTC could make one more attempt at $50,000. If BTC continues to go sideways, there is a chance that value will flow out of BTC and into altcoins.
Total altcoin market cap respects support
Looking at the weekly timeframe for the Total3 chart (which represents the market cap of all altcoins excluding BTC and ETH), the support level is currently holding. A trend line drawn from the top of the bull market in 2017/2018 through to 2024 shows that the altcoin market cap respects this line, and there was a recent bounce from this level during a drawdown.
Overall picture still unclear
The current situation is uncertain for altcoins, as BTC faces selling pressure from the Grayscale ETF and uncertainty in the market. Despite this, neither BTC nor the altcoin market cap have broken their trends. This leaves the possibility open for BTC to continue going sideways and for altcoins to benefit from investors looking to diversify away from BTC. Ethereum (ETH) would likely be the first beneficiary in this scenario, followed by the major altcoins and potentially lower-cap coins. There is still a potential for a significant altcoin season with major price gains.
Hot Take: Will Altcoins Catch Up to Bitcoin Before a Corrective Phase?
With Bitcoin potentially reaching its market top and entering a sideways phase, there is a possibility for altcoins to catch up and see increased value flow. While the overall picture remains uncertain, altcoins have shown resilience and respect for key support levels. Investors looking to diversify away from BTC may start with Ethereum and then explore other major altcoins and even lower-cap coins. Although this trend might have already started, a full-fledged altcoin season with substantial price gains is still a potential occurrence.
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