Bitcoin Correcting, Time To Load on Altcoins?

Bitcoin is currently consolidating around $35,000 as the hype surrounding the spot ETF has increased, but altcoins have been suffering. What's next? Are we actually into a bull cycle or are we in a bear trap?

Bitcoin Correcting, Time To Load on Altcoins?

Written by: Michaël van de Poppe

Bitcoin is currently consolidating, while in the meantime the unemployment data is worse than expected. This is beneficial for the cryptocurrency markets, as this has also been the bottom call in the previous bear market. Lower yields are good for commodities, tech stocks and crypto. However, if this goes up too heavily, the economy is cracking and we'll be seeing more downside.

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When we're looking at the higher timeframes of Bitcoin, the price has finally broken upwards, which means that we're expecting more strength to occur from the markets. This doesn't mean that we're going there in one-go. It means that we're getting into a new equilibrium where prices are probably finding itself new support and resistances.

In that regard, if Bitcoin sustains above $30,000, everything is completely fine. In the short-term, if Bitcoin continues towards $38,000 and stalls there, we've got a new range to act in. The bull market is here, but that does also imply that we'll be seeing some retests and relatively slow momentum, the heavy momentum is skewed towards altcoins.

The total market capitalization of crypto is currently resting on an upwards trend, but the conclusion is the same as the conclusion from last week. Bitcoin is outperforming the rest of the markets, which means that altcoins still need to follow through and that's the ultimate million dollar question. They'll start to move when Bitcoin settles and as Bitcoin is correcting, there's no confidence in the markets, through which we'll see altcoins correct as well.

The moment that Bitcoin starts to settle, that's the moment where we'll be seeing more strength flowing towards altcoins, just as we've seen in the previous period with Solana and Injective.

In terms of price action, it's very likely to expect a pattern comparable to the price action we've witnessed in 2015 & 2016.

This price pattern is very common for the start of a bull cycle, as it implies upwards trends, but not excessive. The last 10% of the cycle generally provide 90% of the returns, so it's quite normal to have relatively boring price action during the first stages of a bull cycle.

In that regard, the perspectives for a potential spot ETF are there, and price has been picking up. This resulted into altcoins following suit as some of them have been started to trend upwards. If we're looking at the altcoin structures at this point, we can definitely see that there's not the confidence in the markets, yet, but it will come in the upcoming period as it always does at this part of the cycle.

The altcoin market capitalization is currently still consolidating and it shows a different pattern than the price action we've seen on the total market capitalization and Bitcoin's price action.

in that regard, we confirm the thesis of relative weakness in the markets, as otherwise you'd suspect that the altcoin markets would be outperforming the price action of Bitcoin. That's simply not the case, so there's still a lot of upside to be made on the markets.

Now, what about the altcoins? Last week we've been focusing on a few altcoins and we're going to discuss those again, while adding another new one. In this update I'll write about Bluzelle (BLZ), Chainlink (LINK) and Ankr (ANKR).

In our latest update I've been providing a technical analysis on Bluzelle, in which the critical area was the area around $0.20 for a potential entry point.

This price action has resulted into a return of 70% in a time span of a few days, congratulations if you were trading this particular asset. These moves do take place at the beginning of a bullish cycle. The question is whether this will sustain itself and through that, there's not really an entry point to be defined as we speak. Personally, I'd be interested around the area of $0.2250.

Regarding Chainlink, the price action is still the same. If Chainlink remains strong, as the markets are potentially that currently, we are not going to get these retests soon. Overall, we would be writing down these levels as potential retests.

In that regard, if Chainlink drops towards $10, I'd be a definite buyer. The thing with uptrending markets is that they are usually giving tremendous opportunities. During those opportunities, the majority of people is going to be bearish and expect further downwards momentum. My advice would be to use those opportunities.

Ankr is one of those examples. The obvious retest isn't happening at this point, which means that we're looking at a clearcut correction of 20-40%. If that doesn't happen, then you shouldn't be entering for longer term trades as the confluence isn't there.

In the current price action, Ankr is providing some corrections of 5-12% , which can be taken for daytrading purposes, but that's about it.

The markets continue to trend upwards and they will continue providing opportunities. It's all up to you whether you'll be taking them.

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