Altcoins in the middle of the bear market? Why appearances are deceiving

A year that started badly…- A period marked by a general decline in risky assets. The equity market corrected sharply, like some stocks such as Netflix or Facebook (Meta), which lost 70% and 55% respectively. On his side, Bitcoin (BTC) has lost 50% since its all-time high, but the king of cryptocurrencies is showing resilience as the bad news is linked on the macroeconomic side. Altcoins suffer, but show resilience. Bearmarket approaching? The graphs are however different from 2018…

>>This analysis is offered in collaboration with Trading du Coin and its algorithmic trading solution finally accessible to individuals<<

Ethereum still strong against Bitcoin!

Ethereum is the leader among altcoins. It is interesting to watch how it behaves against Bitcoin:

Price of Ethereum against Bitcoin (1W)

Graphically, we see that the situation has not nothing to see with 2018. The beginning of bearmarket of 2018 was marked by a bearish pattern in “M” top in weekly time unit. The trendline pushed prices back to 2020 where price managed to reverse. It was the start of a Ethereum outperformance against Bitcoin.

Since this change in trend, Ethereum outperforms Bitcoin. We had a first top on Bitcoin in May 2021 then a second in November 2021. Therefore, it is normal to wonder if the market is in the bearmarket. From a graphical point of view, the Ethereum/Bitcoin pair draws a bullish channel. At the moment, nothing resembles the bearmarket of 2018. Ethereum shows itself solid against bitcoin.

Momentum, which describes the strength of buyers versus strength of sellershowever, shows that the sellers have taken over. This could quickly change if the trendline was broken. In this case, Ethereum could regain strength and propel itself against the resistance of this channel.

Can altcoins recover?

The capitalization of altcoins.

Altcoins undergo – for the vast majority – the general fall in risky assets. The altcoin chart remains however very encouraging in weekly time units:

Altcoins remain strong.  We could find a capitalization between 1.4 trillion and 1.55 trillion in the coming months.
Capitalization of altcoins (1W)

We know a complicated periodof course, but the capitalization remains solid. Like Bitcoin or Ethereum, the capitalization of altcoins draws a bullish pattern on a weekly scale. It is an identical structure to that of summer 2021, a “W” bottom structure. Fibonacci expansions 1.618 and 2 give objectives between 1.4T and 1.55 T. Assuming the macroeconomic situation improves in the coming months, the capitalization of altcoins could also do a new all-time high.

The momentum shows a feedback from buyers recently, but the RSI is still located below the downtrendline. This trendline would have to be broken to find some buying force.

The capitalization of altcoins is always bullish. It seems that she is looking for a low point in this dynamic. For the moment, there is nothing alarming at the level of this graph, on the contrary.

Altcoins against Bitcoin: the bullish signal is long overdue!

The chart of altcoins against Bitcoin shows if altcoins are strong against Bitcoin or if they suffer the fall as during the 2018 bearmarket. Here is the chart in weekly time unit:

If the altcoins manage to break the resistance, we could find an altseason.
Total 2 chart against Bitcoin (1W)

It’s a very interesting graph. Here again, we quickly see that there is no common features with 2018. Altcoins draw ascending troughs (sign of bullish momentum) but resistance (red) is doing its job. If the resistor is broken, there will be a strong signal for altcoins with a probable altseason.

An altseason comparable to 2017? We can’t really know. There are many more assets than in 2017 and the distribution of capital could be different. The resistance holds since 2018, this is a very important level for altcoins. Altcoins will certainly increase in valuebecause there is no resistance above. The altcoins will then be able to fully express themselves.

As long as this resistance holds, there is no no altseason in sight. In the weeks to come, we may come test this resistor a fifth time. As you know, the more resistance is tested, the more likely it is to give way.

Bitcoin dominance is in a downtrend.
Bitcoin Dominance Chart (1W)

Once again, it would seem that there is no resemblance with the start of the bearmarket in 2018. In 2018, Bitcoin resumed significantly strength in dominance. This is currently not the case. the support stands at the level of 40% of dominance, but the dominance of Bitcoin is no longer able to mark upward peaks.

If the dominance happens to drop below 40%it will also be a signal for altcoins. The next bracket is at 35% of dominance and the bearish exit objective of this triangle is close to 20% of dominance.

The momentum shows a renewed strength for bitcoinbut, for the moment, the zone of neutrality resists. This shows that the rise is not healthy. For altcoins, the RSI should continue to fall. This would show that capital is flowing to altcoins.

Nothing is decided yet on that side, but the altcoins are encouraging. They are not suffering like at the start of the bearmarket in 2018.

Finally, we notice that the market offers us a totally different situation compared to 2018. This does not mean that the market cannot fall again, or that a crash cannot occur. On the other hand, Ethereum is showing itself to be solid against Bitcoin and the altcoins may not have had their last word. At the moment, there is no strong signal regarding altcoins. Support for Bitcoin dominance will have to break and resistance on the altcoins chart against Bitcoin will also have to break if we want to see an altseason again in the cryptocurrency market.

Is it possible to be a winner every time? Whether the bitcoin price is in great shape, or going through turbulence, Coin Trading offers you to increase your chances of success. Indeed, Coin Trading allows individuals to access a trading tool algorithmic and 100% automated. Real trend mechanism, follow our affiliate link to test this tool designed to adapt to market reversals and position yourself on the most dynamic crypto assets of the moment.

Leave a Reply

Your email address will not be published.