The whole crypto market is still experiencing the fear of another bitcoin dump and a continuance down to lower price levels. Altcoins are suffering far more than bitcoin as traders play it safe.
An indecisive market
The market is very indecisive right now as small rallies from bitcoin are generally coming to nothing, and if the big daddy of the cryptoverse is having problems, then the vast majority of the altcoins are probably going to fare even worse.
The Fear and Greed Index is still hovering in neutral territory, signifying this uncertainty, and in this kind of environment traders are sitting on the sidelines and investors are sitting tight.
Whether there is a lot of retail selling going on is very much up for debate, as many may be looking out beyond the next few weeks to the possibility of $BTC finding support and being able to reverse this current down trend.
It’s also got to the point where if one hasn’t sold before now, then it’s perhaps better to just hold on and let the correction play out, especially as $BTC is already down 18%. With strong support at $34,000 a correction of 30% would be a potential total for the bottom of this dip.
Ominous signs for altcoins total market cap
Source: Coingecko/Trading View
Viewing the chart for Total3 (market cap of all altcoins excepting $BTC and $ETH) a rather ominous M pattern has taken shape. It could be that the price has already rejected from the neckline and therefore it won’t play out. That said, if the price does come down again and breaks through the neckline, the resulting drop could take the altcoins market cap a lot further even than the major support at $407 billion.
Higher time frame bearish or bullish?
Source: Coingecko/Trading View
Zooming out to the weekly time frame, the story for altcoins also looks uncertain. The market cap of altcoins has been rejected from a trend line going back to 2018. The price now looks to have confirmed this rejection, and unless it can get back above the trend line, things do not look good for the altcoins.
That being said, this trend line can be drawn a number of ways, and if one considers the middle line, a retest of support can have taken place, and going with this particular option, altcoins appear to be more bullish.
The market is the arbiter of how things eventually pan out for crypto, and therefore, it is always best to trade and invest with extreme caution. Also, trade wisely by reducing risk as much as possible.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: https://cryptodaily.co.uk/2024/01/altcoins-continue-to-bleed-out-as-fear-over-bitcoin-correction-persists