4 Signs the Cryptocurrency Altcoin Market May Have Finally Bottomed

Bitcoin (BTC) fabricated a sudden bound of 9% in the past 24 hours. Nonetheless, altcoin cryptocurrencies take been showing forcefulness recently likewise.

Recent surges from large caps have been in the double digits with Dash (DASH) surging 50% and Bitcoin Greenbacks (BCH) 30% in the past 4 days. Is it possible to describe a conclusion that the altcoin marketplace capitalization is potentially bottoming? Let's find out.

Crypto marketplace daily operation. Source: Coin360

Altcoins retraced to their cycle lows

Many altcoins have reached their cycle low levels, which ways that many of them hit levels not seen since earlier the bull market in 2022, and some have fifty-fifty dropped to their January 2022 levels. One example is Dash.

Dash BTC five-mean solar day chart. Source: TradingView

Markets tend to movement in cycles, through which data accumulates from previous periods. The Dash chart is showing a cycle low in 2022 at the dark-green rectangle.

A similar level and bounce are spotted from this price through the past weeks, combined with bullish divergence. This bullish divergence was also spotted on smaller time frames in January 2022.

XMR BTC 5-day chart. Source: TradingView

At the same fourth dimension, a full retrace to these levels is not always necessary. It tin can also retrace towards the cycle lows in 2022. An example of such a nautical chart is Monero (XMR). This privacy-focused money retraced back to the get-go support of the concluding wheel, plant around 0.00600000 satoshis.

The aforementioned phenomenon is spotted hither, which means that there'due south another bullish divergence marking a local bottom.

So is a new cycle is going to commencement? If we would do a survey of sentiment between regular altcoin investors, then it would currently be "depression," as the majority of the altcoins have been crushed in the final months against their BTC pair.

Moreover, a similar view is found on USD pairs with XRP (XRP), in item, demonstrating major weakness in recent months.

XRP USD 5-day chart. Source: TradingView

XRP lost major support at $0.30 and retraced towards the next major support, seemingly the last "crucial" one. The same views were constitute in the previous cycle, through which similar support was tested before continuation and a bull market started. That flow was in Jan 2022 when the breakdown occurred, and now information technology'south January 2022.

Bitcoin in the process of finding a bicycle low

Remarkably, the best period for altcoins is when Bitcoin makes a slow, upwards grind. People tend to have Bitcoin as their safe oasis and trade altcoins a bit more. However, when Bitcoin starts to plough parabolic (like nosotros saw in June 2022), altcoins are being sold for Bitcoin. And when Bitcoin decides to motion downward, people and traders sell their cryptocurrencies for USD.

Hence, Bitcoin has to now find a cycle low for altcoins to gain some upwardly momentum.

BTC USD 5-24-hour interval chart. Source: TradingView

Given this chart, the price of Bitcoin striking a four-twelvemonth quondam trendline and bounced from it. Bated from that, the golden pocket Fibonacci ratio held as well, which is showing signals of a possible bottom formation.

Similar, in January 2022, a bottom germination was establish as well, which gave altcoins liberty to grow, every bit the cost of Bitcoin was making slow movements to the upside.

A like thought and expectation could be the instance hither, in which Bitcoin is slowly grinding upwards in the coming months, giving altcoins space to continue.

Long-term downtrends break to the upside

Another significant sign is the stoppage of downtrends. Some large caps have broken out of their 2-year onetime downtrends while some of them still have to intermission upward. One example is Bitcoin Cash.

BCH BTC 5-day chart. Source: TradingView

This chart shows that the price bankrupt a 2-twelvemonth sometime downtrend, which could point the start of an uptrend from here. A similar breakout is seen in the Ethereum Classic (ETC) chart, though, admittedly, Ether (ETH) is non quite there yet.

ETH BTC 4-day nautical chart. Source: TradingView

All the same, Ether is close to breaking it. If nosotros analyze this chart, information technology shows that ETH fully retraced to the 2022 lows also. Additionally, the depression in September 2022 at 0.01645000 satoshis marked a bullish divergence.

This pattern likewise marked the beginning of previous bullish reversals. For case, as of January 2022, a slightly college low led to a breakout of the downtrend, comparable with the movements of Jan 2022 and January 2022.

Thus, another 2-year old downtrend is on the table here, ready to be cleaved to the upside. If that occurs, a meaning motion should occur for altcoins if the biggest altcoin finally breaks out of its downtrend.

Indeed, the first quarter of the year once again looks like a good period for trading altcoins. In fact, Ether has been reversing these downtrends almost ever in Q1.

Total marketplace cap eyes potential breakout subsequently a retest

Full altcoin market capitalization chart. Source: TradingView

A pregnant sign is a bounciness in the green zone from the total altcoin market capitalization. This level was the support zone in 2022 before the big bull market. The level too served as support in April 2022 before the significant surge of altcoins occurred (and ETH rallied towards $360).

However, the total altcoin capitalization needs to testify forcefulness and break the downtrend. If that occurs, total altcoin capitalization could so come across $lxxx and $125 billion equally the next levels.

Total altcoin market capitalization chart of 2022. Source: TradingView

A like retest occurred from November 2022 to January 2022, the last cycle'due south low. A retest was necessary to ostend support earlier the altcoins started to make their moves.

Therefore, there are more arguments for potential long entries and possible bottom formations on altcoins rather than further downwards pressure. However, the crypto market is highly unpredictable, then tread carefully. If Bitcoin decides to make a move towards $ix,500, altcoins may probable be crushed farther against their BTC pairs.

The views and opinions expressed here are solely those of the author and exercise not necessarily reflect the views of Cointelegraph. Every investment and trading motion involves gamble. You lot should comport your own enquiry when making a conclusion.

Source: https://cointelegraph.com/news/4-signs-the-cryptocurrency-altcoin-market-may-have-finally-bottomed

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