Altcoins Awaiting Bitcoin Decision? Altcoin Friday!

The past week has been extremely boring on the markets, as Bitcoin didn't provide an upwards breakout. Apparently, confirmation needs to come from the King of crypto to make sure that altcoins are actually making that upwards move. What's next?

Altcoins ready for an upwards breakout or is the depression going to last?

Written by: Michaël van de Poppe

Recently, we've had a big surge on XRP and XLM, but we've also been given an upwards sweep on Chainlink, resulting into some momentum for atleast a week. However, due to the recent macro-economic events, Bitcoin decided to have a correction. That correction wasn't what altcoins were looking for as altcoins started to correct in tandem with Bitcoin. They need some strength and conviction in the markets to actually provide upwards momentum, which we currently aren't having.

The overall weakness can still be discussed through the overall market sentiment. Everybody expects a market to break south and to retest lower levels, it's almost for certain, while if you're monitoring the higher timeframes on the markets, you'll get a different picture. The mindset is that people are seeing this as a bear market relief rally in which new lows are almost for certain.

But does it have to be the case? Bitcoin has been making higher lows since November 2022 and has also been granting higher highs. Of course, the recent move towards the highs and the immediate rejection doesn't show strength, but it also doesn't mean we need to test the lows.

Additionally, given the recent events taking place, the Dollar has been showing strength, resulting into weakness on the Gold and Bitcoin markets. However, what are the charts telling us?


The total altcoin market capitalization shows a consolidation period. I've mentioned this in previous week, but nothing really changed. Between the two horizontal lines, that's what we call accumulation as a break above the highs clearly confirms that we're in a new bull cycle and uptrend.

In previous cycles, these consolidative periods could last for months and months. That's the second capitulation event for a market cycle. The first one is the price, which drops in a super fast period. After price has been stabilizing, time will be the next variable to get everyone out of the markets. The longer the markets stay in the accumulation period, the larger the break out, but also the heavier holders will need to hold their position, as slowly but surely the conviction is dwindling from the markets.

The Bitcoin dominance is still copy/pasting the cycle of 2019 in which we're seeing a rejection at the 200-Week MA and EMA taking place in the previous period.


This rejection has been taking place in the area of the 200-Week MA and EMA in the previous cycle as well. Why? Well, we're one year before the Bitcoin halving. Bitcoin slowly grinds upwards, but in the meantime, we don't have any conviction in altcoins and they are slowly dropping a percent per day to lose interest by everyone.

Recently, altcoins have been showing some strength (and ETH is picking up some pace, it doesn't look bad on the monthly timeframe for ETH/BTC). Probably that'll last. The upwards tick, which we've also seen in 2020 could be due to Bitcoin breaking out heavily above $31K. If that happens, you can assume a big move on the BTC pairs takes place to reverse just when Bitcoin starts to consolidate.


If you check the ETH/BTC chart, a conclusion can be drawn that we're trending downwards. However, BTC pairs and altcoins have a very strong trend downwards, which usually goes by losing 80% of the value in a matter of months.

In this case, we have a gradual correction of approx. 20% in a year. A year. Very healthy and natural to have such a correction and this could also state that we're still trending upwards and just having some standard corrections.

Overall, ETH/BTC doesn't look bad at all and so is the remainder of the markets at this point.

Chainlink is another example. The USDT pair is slightly waking up and still acting in the range, but having a deviation beneath the support low. We can easily continue running from here, while remaining in a status quo at this moment.
The USDT pair shows what we were looking for in the beginning. Manipulation beneath support, through which liquidity can be taken, which is required to reverse the markets.

Strong reclaim has been taking place since, as we can see that the markets have been able to grant itself success above $6. Additionally, a rally towards the other side of the range has been taking place to $8.

Now, a status quo is here in which the prices of Chainlink are consolidating between $7-8 to find itself into a balance before making the next move. Does that mean that it's acting in a weak manner? Of course not. It's just consolidating and flipping levels for support. As long as we stay above $6, continuation seems likely.

The other chart is the LINK/BTC chart, which shows the strength of LINK against Bitcoin. Well, we're at cycle lows, as you can see. The valuation recently was the lowest since the end of 2019.

That shows the lack of interest in the markets, as people want to see strength before they'll get interested. Hence why specific altcoins are getting the focus (including XRP).

However, a sweep beneath 2240 sats has been taking place. A reclaim has happened and this reclaim is the trigger for continuation, through which a rally towards 4000 sats might be possible.

That's the update for this week. Next week I'll dive into some more altcoins!

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