The altcoin market cap (ALTCAP) has created a bullish pattern just above the $760 billion support area and may start a bullish move soon.
On November 10th, the total altcoin market cap hit a new all-time high of $1.31 trillion. Since then, however, it has declined.
ALTCAP broke below resistance at the previous all-time high of $970 billion, making the previous breakout a deviation (red circle). The $970 zone is currently acting as resistance again and last caused a rejection in December.
Currently, ALTCAP is trading just above the $760 billion support, which is both horizontal support and 0.5 Fib retracement support. It is a very strong support level due to the confluence of these factors.
Trader @PrinceofElliott tweeted an ALTCAP chart and said it is likely to continue its downtrend with a target of $400 billion. However, he suggests that bullish action will occur before the decline.
The source: Twitter
A closer look shows that the daily chart fits this assessment.
ALTCAP has formed a double bottom above the $760 billion support area.
The double bottom is considered a bullish pattern, which means it usually leads to bullish moves.
Additionally, the pattern has been associated with a bullish divergence in both the RSI and MACD (green line). Such divergences often precede upward moves. The fact that they occur in conjunction with a bullish pattern makes the probability of a price rally very high.
A break above the descending resistance line that has been forming since November 10th will confirm that the uptrend has started.
If so, ALTCAP will rise again to the $970 billion resistance area.
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