Complete Altcoin Analysis: Opportunity or Risk?
Recently, the altcoin market has experienced high volatility. But before diving into specific analyses of Ethereum, Solana, and Dogecoin, we must understand that Bitcoin dictates the direction of the crypto market. If Bitcoin rises, it pulls altcoins up; if it falls, altcoins follow. Let’s start by analyzing Bitcoin before exploring the leading altcoins.
Bitcoin: Correction or Trend Reversal?
Monthly Chart
Bitcoin has undergone a recent correction, but does this indicate a bear market? Looking at the monthly chart, we can see that the current drop does not yet constitute a trend reversal. Historically, major declines have been accompanied by:
- A lower high than the previous one
- A violated low
- Price below the 20-period moving average
So far, Bitcoin has only corrected 38% of its last rally, which is a normal behavior in an uptrend. Additionally, the selling volume remains below average, and the RSI does not indicate extreme overbought levels, suggesting room for further upside movement.
Weekly Chart
On the weekly chart, we observe a bearish divergence, as the last high was slightly higher than the previous one. However, there is a strong bullish sign: large lower wicks on corrective candles, indicating buyer defense. This movement can signal that the market views this decline as a buying opportunity (buy the dip).
If Bitcoin breaks the resistance of the last high, there will be no significant resistance above, allowing the asset to continue its uptrend.
Ethereum: Critical Point in the Trend
Ethereum has shown movements similar to the S&P 500, suggesting a correlation with traditional markets. The Ethereum monthly chart displays two highs at the same level and a risk of losing support, which could indicate a more significant decline.
If Ethereum breaks this level, the next significant support is over 40% below the current level. In the weekly chart, the asset follows a downtrend, with lower highs and lows and a price below the 20-period moving average. However, the lower wicks suggest some buyer defense.
For a trend reversal, Ethereum needs to form a higher low and break the moving average. Otherwise, it may continue its downward trajectory.
Solana: Resilience Amid the Drop
Solana has also suffered a sharp drop of over 50% from its all-time high. However, the selling volume has been low, suggesting that the movement was more of a profit-taking correction rather than a trend reversal.
The cryptocurrency is still holding at the 20-period moving average on the monthly chart, with critical support at $110. If this support is lost, we may see a more pronounced downtrend.
On the weekly chart, the drop was sharp and fast, unlike Ethereum’s gradual progression of lower highs and lows. For Solana to recover its uptrend, it needs to form a higher low and break the 20-period moving average.
Dogecoin: Just a Correction?
Dogecoin has corrected 50% of its last rally, a common movement for highly volatile assets. The monthly chart indicates that we are still within an uptrend, despite the steep 60% decline.
To confirm a trend reversal, Dogecoin would need to:
- Break below the 20-period moving average
- Form lower highs and lows
However, if Dogecoin holds its current support and forms a higher low on the weekly chart, this could indicate a new bullish opportunity.
Conclusion: Opportunity or Risk?
Despite the sharp correction in the altcoin market, we have not yet seen a trend reversal on the monthly chart for major cryptos. Bitcoin continues to correct within an uptrend, and some altcoins show resilience even after significant drops.
The key now is to watch for the next movements and avoid impulsive trading. Opportunities arise in corrections, but it is crucial to confirm reversal signals before entering the market.
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