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Key Trend Driving Altcoin Market Toward $425 Billion: Analyst | MATIC News
Amid the bullish sentiment around the crypto landscape, the Altcoin overall market cap has displayed positive strength as many investors and traders are throwing capital into several altcoins ahead of the bull cycle.
Altcoin Market To Rally Toward $425 Billion
Since Bitcoin has surged to a new record high, many cryptocurrency analysts anticipate a surge in the altcoin market cap. Rekt Capital, a cryptocurrency expert and trader, has shared a positive prediction regarding the altcoins market cap with the community on X.
The expert analysis delves into the current state of the market and its potential to surge higher in the coming months. His projections came in light of the altcoin season index showing advancement, which suggests that its season is almost here.
According to the analyst, the market has been “redirected into the blue-circled testing area,” which was caused by rejection from the “red-circled circle zone.” However, the market has rebounded since then, indicating an increased interest from market investors.
Furthermore, Rekt Capital noted that the market has surpassed the “$315 billion red line of resistance.” As a result, the red line resistance level has now been changed to a “new support level.” Due to this, the crypto analyst anticipates a surge to the “light blue circle” at the $425 billion threshold in the upcoming months.
The post read:
The red-circled area rejected the Altcoin Market back into the blue-circled retesting zone. Since then, the Altcoin Market Cap has recovered, broken beyond the red $315bn resistance, and turned recently into new support. Next is the light blue circle, over time.
However, Rekt Capital also asserted in another recent post that the “$315 billion mark is still being retested by alts market cap new support.” It has been unable to move past it despite today’s double-digit declines on several altcoins.
Even though the market is still retesting the aforementioned level, Rekt Capital is confident that it will “revisit the $425 billion resistance” soon. He anticipates the market revisiting the level before the Bitcoin Halving event, expected to take place in April.
Alts Gains Are Sustable And Likely To Crash
Chief Executive Officer (CEO) of Bitcoin technology firm JAN3, Samson Mow, has also shared his insights regarding the altcoin market. Despite anticipating a rise in the altcoin market, Mow highlighted that he expects alts to “crash in the upcoming weeks.”
According to Mow, alts have been monitoring the “increase in Bitcoin” after launching BTC Spot Exchange-Traded Funds (ETFs). However, altcoins do not possess “the $500 million to $1 billion” daily inflows seen with Bitcoin.
Consequently, this should be the “major sign” that their gains “can not” be maintained. “MSTR has a $30 billion market cap, Solana is $73 billion. That is absurd. A correction is overdue,” he added.
Featured image from Shutterstock, chart from Tradingview.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
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Longest Miner Capitulation Since 2022 Signals Potential Bitcoin Rally Ahead | MATIC News
Bitcoin (BTC) has recently struggled to regain bullish momentum, remaining in a consolidation phase just above the crucial $60,000 support. Despite reaching an all-time high three months ago, the largest cryptocurrency witnessed a dip to as low as $59,500 on Wednesday due to increased selling pressure from miners.
BTC Selling Spree
The ongoing miner capitulation, the longest observed since the summer of 2022 before the FTX implosion, indicates the Bitcoin Halving supply-squeeze effect.
Crypto analyst Ali Martinez noted that Bitcoin miners have sold more than 2,300 BTC in the past 3 days, amounting to approximately $145 million.
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This selling pressure from miners adds to the recent BTC sales by the US and German governments, contributing to the market’s downward pressure and keeping prices within the lower range of the wider consolidation zone between $60,000 and $70,000 witnessed in recent months.
Notably, addresses linked to the German and US governments have sent $737 million worth of BTC to exchanges, including Coinbase, Bitstamp, and Kraken, in various transactions.
As the selling pressure from governments and miners subsides over time, market observers expect a potential price recovery for BTC, following the typical pattern observed during the post-Halving period, where new all-time highs are often achieved.
Bitcoin Price Outlook
Market expert Scott Melker points out that the market may be nearing a crucial signal, stating that if a daily candle closes below the $60,300 level, it could lead to a bullish divergence.
This would involve the daily RSI (Relative Strength Index) moving out of oversold territory, similar to last August when the price was around $26,000.
Melker emphasizes the need for a close below the mentioned level, followed by a clear upward move in the RSI without making a lower low. It would require a significant downward move for the RSI to go lower than its level on June 24th.
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However, crypto analyst Andrew Kang highlights the significance of a potential loss of the four-month range on Bitcoin, drawing parallels with the range observed in May 2021 following a parabolic rally of BTC and altcoins.
Kang notes that over $50 billion in crypto leverage is currently at near all-time highs, compounded by the fact that the market has been in a prolonged consolidation phase for 18 weeks without experiencing extreme washouts, as seen during the 2020-2021 bull market.
Moreover, Kang suggests that initial estimates of the low $50,000s may have been too conservative, and a more significant reset to the $40,000s could be possible.
Such a pullback would substantially impact the market and likely necessitate a few months of choppy or downward price action before a reversal and an upward trend could be established.
At the time of writing, BTC has recovered the $60,350 level after its brief dip below this crucial support for further movements to the upside.
The largest cryptocurrency in the market has erased all gains in wider time frames, and it is currently recording a 12% price decrease in the monthly time frame.
Featured image from DALL-E, chart from TradingView.com
The on-chain analytics firm Santiment has revealed the altcoins that are currently in the historical buy zone according to a fair value model.
A Large Amount Of Altcoins Are Currently Near The Opportunity Zone
In a new post on X, Santiment talked about what the various assets in the cryptocurrency sector are looking like right now based on their Market Value to Realized Value (MVRV) ratios. The MVRV ratio is an indicator that keeps track of the profit/loss status of the addresses on any given network.
When the value of this indicator is greater than 1, it means the investors are carrying a net amount of profits right now. On the other hand, the metric under this threshold implies the dominance of losses in the market.
Naturally, the MVRV ratio being exactly equal to 1 suggests the unrealized loss on the network is exactly equal to the unrealized profit, so the average holder could be considered just breaking even.
Historically, corrections have become more probable when investor profits have ballooned up. Holders become more tempted to sell the larger their gains grow. Similarly, holders getting underwater has facilitated bottom formations, as sellers become exhausted during such conditions.
Based on these facts, Santiment has developed an Opportunity and Danger Zone Model that uses the MVRV ratio’s divergence on different timeframes to estimate better whether an asset is currently providing a buying or selling window.
Now, here is the chart shared by the analytics firm that shows where the different altcoins stand according to this model:
Note that in this model, the zero mark takes the role of the neutral 1 level from the MVRV ratio. Also, the polarity is flipped here, with values under zero implying profit dominance and those above signifying loss.
The graph shows that most of the altcoins are in the positive region right now, suggesting that their investors are underwater. Among these, Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH) particularly stand out as their MVRV divergence exceeds the 1 mark.
Under this model, the region above 1 is called the “Opportunity Zone,” as assets have historically offered the most profitable opportunities while inside it.
While most altcoins are at least slightly undervalued currently, a few, like Ethereum Name Service (ENS), MANTRA (OM), and Reserve Rights (RSR), are in or near the Danger Zone instead. The Danger Zone, which occurs under -1, is the counterpart to the Opportunity Zone, where coins become overvalued.
Ethereum Price
Ethereum, the largest among the altcoins, has faced a plunge of more than 4% in the last 24 hours, which has taken its price under the $3,300 level.
Ethereum (ETH) has become a beacon in the sea of blockchains, boasting a staggering 92% surge in dApp (decentralized application) volume over the past week. This news, however, comes with a layer of complexity, revealing a landscape of both opportunity and potential setbacks for the leading blockchain.
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Cheap Gas Fuels The Fire
Analysts attribute the dApp volume explosion to the Dencun upgrade in March, which significantly reduced gas fees – the cost associated with processing transactions on the Ethereum network.
Lower fees have historically enticed users, and this recent development seems to be no different. The surge in activity suggests a revitalized Ethereum, potentially attracting new projects and fostering a more vibrant dApp ecosystem.
NFT Mania Drives The Numbers
While the overall dApp volume (see chart below) paints a rosy picture, a closer look reveals a more nuanced story. The surge appears to be driven primarily by a surge in NFT (Non-Fungible Token) trading and staking activity.
Applications like Blur and Uniswap’s NFT aggregator saw significant hikes, highlighting the booming NFT market on Ethereum. This trend indicates a thriving niche within the Ethereum dApp landscape, but raises questions about the platform’s diversification beyond NFTs.
A Look At User Engagement
A curious wrinkle emerges when examining user engagement metrics. Despite the impressive volume increase, the number of unique active wallets (UAW) on the Ethereum network has actually decreased.
This disconnect suggests that the current activity might be driven by a smaller, more active user base. While high volume is certainly a positive indicator, it’s crucial to see broader user participation to ensure the sustainability of the dApp ecosystem.
A Glimmer Of Hope?
One positive long-term indicator for Ethereum is the trend of decreasing exchange holdings, as reported by Glassnode. This suggests ETH holders are moving their assets off exchanges, potentially reducing sell pressure and contributing to price stability.
If this trend continues, ETH could potentially target reaching $4,000 this quarter or even surpass its all-time high. However, this price prediction remains speculative and depends on various market forces.
Ethereum At A Crossroads
Ethereum finds itself at a crossroads. The Dencun upgrade has demonstrably revitalized dApp activity, particularly in the NFT space. However, the uneven dApp performance and declining UAW raise concerns about the long-term viability of this growth. Network growth, measured by the number of new addresses joining the network, is also slowing down, according to Santiment, potentially hindering wider adoption.
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The short-term price outlook for ETH remains uncertain. While the long-term indicators, like decreasing exchange holdings, suggest potential for price appreciation, the network’s growth slowdown might lead to a short-term price dip.
Looking Forward
The coming months will be crucial for Ethereum. The platform needs to capitalize on the renewed interest in dApps by attracting a broader user base and fostering a more diverse dApp ecosystem beyond NFTs. Addressing scalability issues and ensuring user-friendly interfaces will also be key to sustaining growth.
If Ethereum can navigate these challenges, it has the potential to solidify its position as the premier platform for decentralized applications. However, if it fails to adapt, other blockchains waiting in the wings might capitalize on its shortcomings.
Featured image from Pexels, chart from TradingView
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