- Bearish pattern combo showing up on altcoin index chart
- Altcoins rejecting crucial resistance levels for further confirmation of upside bias
- Higher lows and double bottom technical formations will signal an uptrend
JAIPUR (Coinchapter.com) – Technical formations on the altcoin index perpetual futures chart are giving out bearish signals. A combination of inverse cup and handle and a bear flag setup imply that selloffs are far from over.
The index that tracks all altcoins’ market momentum has dipped below the crucial 200-day moving average (MA) wave. Altcoins carried out a rally from June 22 to highs near the 3500 level. But the latest bout of selling action has pushed numbers down to sub-3100 levels.
However, 2427 continues to act as a crucial level of support since February 15 this year. A slew of technical indicators points to an overall gloomy mood. But, the 20-day RSI (Relative Strength Indicator) wave portrays a better situation. Ever since cryptocurrency markets tanked more than 50% on May 19, the altcoin index RSI has been trading in a tight 36 – 50 range.
A twitter-based crypto trader who goes by the name of “Crypto Tony” said, “… #Bitcoin is in a delicate position, but when we are below $35,100, I am short term bearish … #Altcoins, however, do look better, with a few popping here and there…”
Altcoins Are Bottoming
Amsterdam-based analyst Michael van de Poppe expressed the emergence of a bottoming situation in his latest take on altcoins. “I think the #altcoins are close to a bottom too. #Litecoin and other altcoins reject a crucial level of resistance, but they are seeking a bit more confirmation before the trend can shift. A higher low or double bottom will do with bullish divergence.”, he said in a tweet about an hour back.
It is important to note that altcoins and the broad cryptocurrency market failed to continue the uptrend in light of the latest Federal Reserve meeting.
Fed officials expressed the need to taper their bond purchases much earlier than expected, followed by a selloff not just in crypto markets but in equity markets and bond yields.
Making sense of van de Poppe’s words, it becomes clear how investors are gauging macroeconomic factors carefully before injecting fresh funds in altcoins. Especially the US dollar. Although the greenback logged selloffs yesterday, it remains short-term bullish. The DXY index opened with a green note at the London opening bell.
From the looks of it, bears still have a firm grip on altcoin markets. But bulls, too, are supporting prices above crucial support levels. Which also points to exhaustion of bearish pressure. The bottoming situation is actual, as van de Poppe pointed out. And it is on the foundation of these bull-protected price floors that altcoins will find the strength to move up higher. But before the liftoff, another retest of support levels is on the cards.