The majority of the cryptocurrency market has been on an upward trend in 2019. After reaching a high in June, the price of most coins has been decreasing. However, the Bitcoin price has had a higher rate of increase and a lower rate of decrease than most altcoins.
Recently, this began to change as several altcoins posted very significant rates of increase. These are mostly Chinese based coins, which have surged since October 25. Most notably, NEO and TRX have increased by 83% and 40% during this time period. However, the rest of the market has lagged behind.
These surges have led many investors and traders to suggest that “altseason” might be finally beginning, a period of time in which altcoins post extraordinary rates of increase, in turn causing the Bitcoin dominance rate to decrease.
Technical analysis reveals that while both the altcoin total market cap and its rate of dominance look bullish in the long-term, a short-term decrease is likely for both.
Cryptocurrency trader @TraderEscobar stated that a number of altcoins have begun to increase, suggesting a pump in altcoin prices until the end of the year.
Altcoin Market Cap & Altcoin Dom.
With so many of our favourite Altcoins in accumulation phases, with some starting to break out already… I was curious to see how these charts looked…
Conclusion- Altcoin Pumponomics Q4 is very much alive 📈 pic.twitter.com/t1545lN2LY
— ESCO₿AR (@TraderEscobar) November 12, 2019
Additionally, he suggested that both the total altcoin market cap and the altcoin dominance chart are both looking bullish.
Let’s take a look at each of them individually and decide.
Overall Market Cap
The total altcoin market cap broke out from a descending resistance line that had been in place since July, before validating it as support.
Afterward, it created a double bottom at the support area of $70 trillion, before beginning the current upward move. The double bottom was combined with a bullish divergence in the RSI.
In the short-term, there is a possible head and shoulders in development which is a bearish pattern. It gains more validity since it is combined with bearish divergence.
Therefore, while the long-term outlook looks bullish, the short-term one seems bearish. We can expect to see a decrease towards the minor support area of $76 trillion.
The altcoin dominance rate made a bottom in September, inside the support area of 30%. Additionally, there is a major support area at 22%. The low was combined with an oversold value in the weekly RSI, the lowest value ever recorded.
In the short-term, the dominance has broken below a support line which had been in place since the aforementioned low.
We could see a validation of this support line as resistance inside the resistance area at 35%.
Similar to the total market cap, the short-term outlook for dominance seems bearish.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of TradingView, Twitter.
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