A breakout of the total market capitalization for altcoins has already taken place. The fuse is lit and all are standing back. Once Bitcoin has made its own definitive breakout, the altcoins are bound to follow.
Altcoin market cap to $2.5 trillion?
Source: TradingView
The weekly chart for Total2 (combined market capitalization of all cryptos, excluding $BTC) shows that not only has a higher high been made, but that also a candle body has opened above the $1.6 trillion multi-year resistance, which has now flipped into support.
Price discovery awaits, but of course, the altcoins always need to take their cue from Bitcoin, and the king of the cryptocurrencies could be about to make a bit of a correction first.
Once all systems are go, and the alts are released, a decent target for Total2 would be the 1.618 Fibonacci at $2.5 trillion. The Fibonacci extension levels have corresponded really well with price so far, so there is every reason to think that $2.5 trillion could be reached in this cycle.
DXY strength has a big influence on crypto
Source: TradingView
Investors and traders in crypto may not look too much over the fence at traditional finance, but the Dollar Index (DXY) has a big influence over all markets. The above short time frame chart illustrates how the $DXY has been in a steady decline. President Trump has also continually said that he wants a weaker dollar.
A recent small rally has taken the $DXY back to $97.60, but a rejection from the trendline is likely to take place. It can be seen that the price did wick down to the ascending trendline at the bottom of the chart. This is not any old trendline, but one that goes all the way back to 2008. If it breaks down, risk assets (Bitcoin and altcoins) could fly high.
USDT dominance about to fall further?
Source: TradingView
Within the crypto sphere, dollar strength is represented by USDT dominance. The 2-week chart above reveals that USDT dominance is also in a downtrend. It can be seen that the 4.50% level is acting as strong resistance. If dominance is rejected from here and falls below 3.80%, this would be a very strong signal indeed in favour of a rise in the value of crypto.
Bitcoin dominance reaches a bottom?
Source: TradingView
Finally, to complete the picture for altcoins, one has to refer to the Bitcoin dominance chart. The weekly chart illustrates how the very long ascent for Bitcoin dominance has now come to end, and not only that, the dominance has fallen through the uptrend.
Currently holding support at 57%, it remains to be seen whether dominance will now start to climb back up, or whether it will fall through this important level. 54.5% is another strong support level below.
If one looks at the Stochastic RSI indicators on this time frame it can be seen that they could be about to angle back up. This would tend to support the view that dominance will start to strengthen again. This still remains to be seen.
