The altcoin market cap (ALTCAP) has created a double bottom pattern inside a significant horizontal support area. A breakout from the current descending parallel channel would confirm that the correction is complete.
The altcoin market cap has been falling since reaching an all-time high price of $1.7 trillion on Nov. 10. The downward move since then has led to a local low of $858 billion on Feb. 24.
The ALTCAP then rebounded and created a long lower wick, which signals buying pressure in the region. Furthermore, when combined with the bounce on Jan. 24, it created a double bottom pattern.
Currently, the ALTCAP is making an attempt at breaking out from the resistance line of a descending parallel channel that’s been in place since the aforementioned high.
If successful in moving above resistance, it could confirm that the altcoin correction is complete.
Future ALTCAP movement
Cryptocurrency trader @AltstreetBet tweeted an ALTCAP chart, stating that a reversal toward the all-time highs seems to be likely.
Technical indicators in the daily time frame support the continuation of the upward movement. This would in turn cause a breakout from the descending parallel channel.
The main reason for this is the considerable bullish divergences that have developed in both the RSI and MACD. Such pronounced divergences often precede a bullish trend reversal.
If an ALTCAP breakout occurs, the main resistance area would be found between $1.28-$1.38 trillion. This target range is the 0.5 and 0.618 Fib retracement resistance levels.
The two-hour chart does not show any signs of weakness.
The altcoin market cap is following an ascending support line and has reclaimed the minor $1.02 trillion level that coincides with the ascending support line and is expected to provide support in case a short-term drop occurs.
Therefore, a breakout from the channel seems to be the most likely scenario.
For BeInCrypto’s previous Bitcoin (BTC) analysis, click here
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