With bitcoin languishing at below $64,000, and the altcoins also still mostly in the red, many traders must be nervously eyeing their portfolios. Should they buy or sell?
The first thing to realise in the trading game is that the buying and selling of digital assets is completely one’s own responsibility. Listening to this or that trader on social media could bring nuggets of wisdom, or could lead one down a perilous path. Educating oneself on the dos and don'ts of trading is the absolute minimum requirement before investing anything.
Altcoins giving cause for concern
That aside, the current state of the altcoin market is perhaps giving cause for concern. Most altcoins are following the lead of bitcoin, which is nearly always the case. If bitcoin goes up, the altcoins generally go up, and in some cases they go up a lot higher. If bitcoin goes down, the general path for the altcoins is down deeper, and at a faster pace.
Therefore, with bitcoin languishing down near its strong support at $61,000, the altcoins are not going to rise themselves until bitcoin has a decent bounce.
Total3 bull flag
Source: Coingecko/TradingView
The Total3 chart shows the price of the combined market capitalization of all cryptocurrencies, excluding $BTC and $ETH. Observing this chart, it can be seen that Total3 is currently resting on the support of the $647 billion price level.
It should also be noted that the price is in a bull flag. Given that this is the weekly chart, a bull flag on this time frame can be extremely powerful. If the price is able to hold at the support, or even if it dips below but recovers, and is able to break the upper trend line, stand by for some possible fireworks.
$1 trillion target for bull flag
Source: Coingecko/TradingView
Zooming out further, it can be seen that unlike bitcoin, the altcoin market cap has still not surpassed the heights of the last bull market in 2020/2021. That said, in past bull markets, the majority of the altcoins usually lagged behind $BTC until the final parabolic blow-off top phase. This is when liquidity starts leaving $BTC and floods into the altcoins.
Could this happen in this bull market, or will things be different this time? Only time will tell. On the positive side of things, the Total3 bull flag has still to play out. If there is a confirmed break to the upside, the measured move for this breakout would take the altcoins to the $1 trillion price level, which wouldn’t be far off of the high of the last bull market.
Financial education is vital
Trading cryptocurrencies is a perilous endeavour. If an investor/trader is able to buy at a low price, and that particular altcoin rises, a potential substantial profit could be made. On the other hand, buying into an altcoin that is about to sell off, could leave the investor with a big loss.
Buying or selling altcoins is perhaps something best left to the professional traders. Nevertheless, leaving one’s currency in the bank could also be of grave concern, as inflation and diminishing purchasing power steals wealth rapidly.
The world of finance is a tough one to be in right now, and is likely to only get tougher. Therefore, make every effort to educate yourself on fiat currency and assets, which include bitcoin and altcoins. Your future could depend on it.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
