Why The Altcoin Market Is Waiting for A Move
Capital rotates within the crypto market, often flowing from Bitcoin to altcoins after extended periods of losses in altcoins. At this point, Bitcoin’s dominance is usually at incredibly high levels and due for a correction. However, a stable Bitcoin price is usually required to support an altcoin rally. Furthermore, prices cannot go down indefinitely, and volatility is always present, even if only periodically. It does appear that Altcoin Season is here!
Looking at Bitcoin, the price remains relatively strong despite multiple dips over the past few weeks. In actual fact, it’s starting to look rather bullish! The market has been in a state of uncertainty, swinging between $30K and $40K. Currently, we are witnessing a potential inverse head-and-shoulders pattern forming, which could see BTC regain the 60K zone if validated. A confirmed breakout of the neckline can introduce a fresh bullish bias.
Altcoins, on the other hand, are not looking so good overall. There are, however, projects such as MANA and MATIC that have not lost much ground. The majority of the altcoin market, however, is quite heavily in the red. Bitcoin usually steals the show when it makes a strong move, but altcoins also catch a delayed thrust of momentum. So, one needs to consider what could transpire if this inverse head-and-shoulders pattern plays out for Bitcoin!
Why Traders Wait For Technical Analysis Confirmation
This would generally be the wise approach, especially for traders. Long-term investors are at far less risk, and if they have an ongoing, scheduled accumulation strategy, they can always increase their holdings at lower levels. Despite what anyone says, the HODLer is always in the safest seat and can ride out volatility with far less stress. Leveraged positions can sometimes be erased, given enough contrary pressure.
I have started slowly increasing exposure to a handful of alts, as mentioned in a recent post. This is a very modest allocation, as I, too, want to see more bullish confirmations. What encourages me to do so now is that these are long-term holds, and I am happy to buy at these levels. Considering Bitcoin’s position and the fact that altcoins are so heavily discounted, a rally is well within the realm of possibility.
Market Rules Are Not Set In Stone – Especially In Crypto
That is the thing, each investor needs to assess their own personal situation and then act and plan accordingly. There are obviously pearls of wisdom everyone should consider, but there is also a lot of room to move within the bounds of wisdom. I definitely would not go in guns blazing at this point, as the market really does require a significant indicator, such as the confirmation of the pattern I have just mentioned.
Sometimes a perfect opportunity can dissolve right before your eyes. In this game, confirmation builds confidence and, in turn, increases the odds of success. This, as you may well know, is not necessarily a guarantee of success. However, siding with confluence is the safest move any investor or trader can make.
What Are The Real Odds For Altcoins?
It’s a game of probabilities, and that’s as sure as it gets. This is especially true of the world we live in now. Constant chaos and unpredictability place markets in a very fragile position. Risk-on assets are especially vulnerable, and investors need to be aware of developments at the macro level and in alternative markets. Uncertainty can also fuel volatility, which is not necessarily a bad thing, especially for traders. Actually, volatility is the lifeblood of a skilled and efficient trader.
Why Traders Should Work With The Market Trend
On the other hand, a sideways market can actually be a friend of an investor with a long-term horizon. If the price is constantly appreciating, then he is, in essence, paying more for his coins each time he buys. Sideways price action provides an extended opportunity to accumulate at a set price, rather than at a constantly rising price. As I have often said, there is always an approach that can and will benefit in any market condition.
Final Thoughts
It would be wise to wait for a bullish confirmation pattern on a larger time frame before blasting into the altcoin market. If you are like me and have some very long-term ideas, you can begin accumulating modestly. This is obviously not investment advice, but rather what I am doing right now regarding altcoins.