The total altcoin market cap began an upward movement on September 24. It gradually increased until November, before breaking down. On November 25, it reached a lower low than on September 24, invalidating the upward movement.
While several altcoins have been posting double-digit increases on the daily, such as Ravencoin, which has increased by 19%, the market in its entirety has been on a downward trend since late May.
The upward movement that began on September 24 had many calling for a period in which altcoins would increase massively due to the fact that they were doing so during a Bitcoin price decrease. However, the altcoin market cap reached a lower low on Nov 25.
A similar sentiment is given by technical Analyst @LomahCrypto, who suggested that trading altcoins has not been very profitable, and will likely continue being so since the market has approached a strong resistance.
Something that I've been neglecting lately is trading ALTS with respect to how the ALTS market cap looks.
Back-testing with my journal for W/L trades I would have avoided 11W and 18L since July if I just avoid trading ALTS completely when we're at D3/W1 resistance. pic.twitter.com/FKaEu7KXNJ
— Loma (@LomahCrypto) December 3, 2019
This is in stark contrast to the sentiment of only several weeks ago, in which the majority of crypto twitter was calling for the beginning of the next ‘altseason.’ Let’s take a closer look at the price movement and see where it’s likely to head next.
Altcoin Market’s Strong Support
The altcoin market cap has created a very strong support area at $60 billion, which is reinforced by the 0.786 fib level. Inside it, the price has made a possible double bottom, which is considered a bullish reversal pattern.
Therefore, the current movement can be seen as a retracement in response to the upward move beginning in December 2018. The total market cap would have to stay above the support area and soon initiate an upward move. There is no bullish divergence to suggest that this will happen.
A closer look reveals a break down from an ascending support line. Afterward, it validated this as resistance and is currently heading downward. The price is also following a descending resistance line.
This suggests that the price will move towards the next support area at $50 billion, where it will possibly make an attempt to move higher.
The very short-term market movement shows a descending wedge. Additionally, there is a bullish divergence in both the RSI and the MACD.
This suggests that a breakout is likely. However, it remains to be seen whether this movement will cause the total market cap to move above the previously broken ascending support line. Due to the bearish medium-to-long-term outlook, this seems unlikely.
To conclude, the altcoin market cap has possibly broken down below a support line and validated it as resistance. Lower time-frames suggest an upward movement will occur, but it remains to be seen whether the move will invalidate the previous breakdown.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Twitter, TradingView.
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Source: Be In Crypto