Since early December $BTC has gone sideways. Spot Bitcoin ETFs now approved, the market top for bitcoin could be in, so will there be an altcoin catchup before the whole crypto market descends into a corrective phase?
Break of support or another spike up?
Source: Trading View
Judging from the daily chart, $BTC may well have made its market top, at least for this phase of the bull market. The price is still holding above the channel, and is also sitting on the support.
For $BTC to break these supports to the downside would be very bearish, and a deeper correction could be in store. However, the trend remains unbroken as things stand, and there is even a chance that $BTC could make one more attempt at $50,000.
That said, $BTC is currently going sideways, and if this should continue there is a possibility that some value will flow out of the number one cryptocurrency and into the altcoins.
Total altcoin market cap respects support
Source: Trading View
Zooming right out on the weekly time frame for the Total3 chart (total market cap of all altcoins, excluding $BTC and $ETH) it can be observed that that support is currently holding. Also, if a trend line is drawn from the top of the bull market in 2017/2018, all the way through to 2024, it can be noted that the market cap of the altcoins respects this, and a recent drawdown bounced from this level.
Overall picture still unclear
The current picture does look rather uncertain for the altcoins, with $BTC taking some selling pressure from the Grayscale ETF, and the market in some uncertainty having seen $BTC rejected quite heavily from $49,000.
Regardless, neither $BTC, nor the market cap of the altcoins have broken trend, therefore there is still the possibility that $BTC continues to go sideways, and the altcoins benefit from those wishing to take some of their $BTC chips off the table and invest these profits higher up the risk curve.
In this scenario, ethereum (ETH) would likely be the first beneficiary, and then the major altcoins, before perhaps some distribution into the lower caps. It might be said that this has already been happening, but a true altcoins season, with major price gains for many of the altcoins, could still be a potential occurrence.
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/bitcoin-goes-sideways-still-time-for-the-altcoins-to-run