With bitcoin taking a slight pull back and dominance looking ready to crash, is a short altcoin season in the offing?
Crypto market in the red
It’s a red day in the crypto market so far as bitcoin possibly makes its way down to the next support at around $29,000. Across the board the altcoins are bleeding, but BTC dominance is still dropping.
The likelihood of a generous pull back for the entire crypto market is surely on the cards at some point. Bitcoin has bearish divergence in place on the daily RSI and is not looking like nullifying it as things go.
Also, the Stochastic RSI has topped on the weekly time frame, so a major pull back looks as though it should be arriving, possibly in the next two or three weeks.
Time for the alts?
However, that does give the altcoins the potential chance to have a run in this intervening period. “Sell in May and go away” could be the age-old advice to follow, but we aren’t there yet.
BTC dominance has hit the top of a range it has been in since May of 2021 and looks to be coming down, having lost a further 0.6% so far today. Losing the current level could see dominance come down quickly to 44%, and give the green light to the alts to make their run.
The Total 3 Market Cap (market cap of all the altcoins minus BTC and ETH) is at a critical level. Currently at $400 billion, the breakthrough level is at $405 billion. If this level breaks then altcoins are looking good for that last surge.
USDT dominance has seen a bounce today, taking into account the slides in BTC and the rest of the altcoins. However, it is at the last good support, and should the bounce not continue, a fairly vertiginous drop in USDT dominance down to 5.2% and perhaps even 4.8% could follow.
Calls for a crypto correction
Many analysts are calling for the crypto market to start its correction now, given some of the negative indicators, and the fact that BTC made nearly 100% gains since the beginning of the year.
Crypto influencer and commentator Alex Becker is one of the detractors. In a recent tweet Becker suggested that there is not enough money in the sector to sustain the run.
Seeing calls for alt season. 3 things people are forgetting.A) . The current BTC pump is all current cryptos/money that left altsB) Alts cannot pump sustainably if BTC is going downC) There is not enough $$ in OR entering the market to sustain BTC AND a alt season together
— Alex Becker 🍊🏆🥇 (@ZssBecker) April 17, 2023
We therefore have 2 potential scenarios. The whole crypto market starts its slide now, or BTC holds, and altcoins get their turn in the sun. Those holding cryptocurrencies should make sure they’re adequately protected as risks are high.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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