- Technical chart patterns have hinted at a significant market shift.
- Uncertainty has loomed despite recent positive indicators; short-term correction is predicted.
- The Impact of a rising stablecoin supply has sparked market anticipation.
According to a recent analysis, the altcoin market has been steadily retesting historic levels, suggesting that it could be poised for a breakout. The rising supply of stablecoins and the formation of a symmetrical triangle on the daily chart for the altcoin market cap (TOTAL2) are fueling these expectations.
Stablecoin Surge Ushers Potential Altcoin Market Breakout
The analysis points to the recent upsurge in stablecoin circulation as a significant factor contributing to the potential altcoin market breakout. In the past 90 days, the supply of stablecoins has increased by 3.5%, marking the first positive trend in this metric in over 1.5 years.
From a technical standpoint, the symmetrical triangle formation on the TOTAL2 daily chart indicates that a breakout is highly probable. If the altcoin market cap enters a bullish phase, it could attempt to flip the resistance level at $747.988 billion into support. This could pave the way for a significant market valuation surge, potentially reaching $874.278 billion within the next week.
However, a negative breakout could return the market cap to the support level of $684.566 billion within 72 hours. If sell pressure persists, the market could decline to as low as $621.085 billion.
MACD, RSI Indicate TOTAL2’s Course Correction on Horizon
Despite the bullish indications, technical indicators on TOTAL2’s daily chart hint at a temporary correction in the next 2 days. The MACD and RSI indicators suggest that buying power has recently weakened.
The MACD line currently resides below the MACD signal line, signaling a bearish trend. Additionally, the RSI line is breaking away from the RSI Simple Moving Average (SMA) line, indicating that bears are gaining the upper hand over bulls.
On the Flipside
- Despite the potential for a breakout, some analysts caution that market sentiment remains fragile, highlighting the volatility inherent in altcoin trading.
- The recent surge in stablecoin supply might not solely guarantee a market surge, emphasizing the complexity of factors influencing altcoin performance.
Why This Matters
While the potential for an altcoin market breakout remains strong, the indicators point to a temporary correction soon. Understanding these technical signals can guide investors in navigating short-term fluctuations and making informed decisions in the dynamic landscape of cryptocurrency trading.
To learn more about the clash between SHIB, DOGE, and PEPE in social activity, read here:
SHIB, DOGE, and PEPE Clash in Social Activity: Who Is Winning?
To discover why altcoins are positioned to explode as Bitcoin dominance diminishes, read here:
Altcoins Poised to Explode as Bitcoin Dominance Wanes?
