A tsunami of liquidations to the tune of $125 million swept through the crypto market. Altcoin capitalization (TOTAL2) fell sharply this week, losing most of its gains the week before
The market has been downgraded by the end of the week
Despite the decline, the bullish structure of the index remains intact on both horizontal and diagonal levels.
Will TOTAL2 be able to regain lost momentum and revive the hopes of a new altcoin season in the hearts of investors?
Last week the BeInCrypto editorial staff already talked about the relationship between BTC, BTCD and the market capitalization of altcoins (TOTAL2).
The altcoin season collided with the first barrier
It looks like the recent rally has stalled.. Bitcoin and ethereum recently updated this year’s high.
Altcoins also began to grow everywhere, and as the rate of strengthening of BTC slowed, market participants began to talk about the possible start of the altcoin season.
However, the subsequent large-scale correction washed out of the market positions in excess of $124 million.
How might this liquidation affect a potential altcoin rally?
Market capitalization of altcoins surged during the week of April 10-17.
The metric confirmed a bullish breakout of the long-term downside resistance line from the all-time high as well as the $605 billion horizontal resistance area.
While TOTAL2 was trading below these levels, the trend was considered bearish..
However, after their breakdown, we can assume that the bulls have regained control of the situation and a new bullish reversal began in the market.
A broken resistance line and the $605 billion area are now expected to provide support.
The TOTAL2
In addition to price dynamics, the weekly Momentum RSI strength indicator also gives bullish signals.
Its uptrend and value above 50 (the index moved above it at the beginning of March, see. green icon) suggest a bullish market.
If growth continues, the next resistance will come into play at $916 billion.
Altcoin capitalization: wait for recovery
The results of technical analysis of the daily chart also support the picture on the weekly timeframe. Here, the price is now retesting a key horizontal resistance area at $610 billion.
It has also bounced off the support line of the rising parallel channel. Usually such channels restrain the price within themselves, so you can expect multiple touches of both resistance and support lines.
The stock is trading above the midpoint of the channel.
Today it is trading above the center line of the channel, so an increase towards the resistance line, which is located at $720bn (average price), seems more likely.
In the meantime, a close below the $605bn support area would neutralize these bullish signals and could trigger a sharp drop towards the $560bn channel support line.