The crypto market is in a bit of a meltdown on Tuesday. $BTC is down 7.5% on the day, and a lot of the altcoins are performing even worse than this. However, a bounce must be coming. Altcoins are likely to look to $BTC to make its local low before the bounce begins.
A sorely needed correction
The crypto market finally has the correction that was sorely needed. Overbought conditions were getting ridiculous, and just like how a rainstorm arrives after a long period of drought, this pullback is extremely refreshing for the whole crypto market.
Source: Coingecko/Trading View
However, that said, the correction could even be about to end. As quickly as it arrived, it could be that $BTC has found its local bottom at $62,500. This is quite early to be calling an end to the correction, but it does line up with support, and also the bottom of the downwards sloping wedge pattern.
Nearly $100 billion wiped off altcoins
Source: Coingecko/Trading View
The Total 3 chart displays the combined market cap for the altcoins, excluding $BTC and $ETH. It can be noted that the market cap fell to $677 billion, down from $770 billion on 14 March - nearly $100 billion wiped off of the alts in 5 days.
Nevertheless, the support at $677 billion appears to be holding, and this could be a good level for a bounce. The long wicks also signify that the price is being bought up.
Source: Coingecko/Trading View
Zooming further out onto the weekly time frame, it can be seen that the support is strong from 2021 and into 2022. This makes it critical that the support holds, although further strong support can be found at $640 billion.
$STX - canary in the coalmine for dump end?
One altcoin that isn’t waiting around for $BTC to signal its hit the bottom, is Stacks (STX). The price held support nicely, and has now broken through the trend line to the upside. A new all-time high is definitely within reach.
$STX is the premier layer 2 on bitcoin, and as such, many see it as a leverage play on the alpha cryptocurrency. The fact that $STX is the first to run may signify that the $BTC bounce is incoming.
At time of going to press, $BTC is showing signs that it has done with this dump, at least for now. A lot of the altcoins are reducing their arrears. Stand by for a rally. $BTC will need to get back above $69,000, or we could perhaps be in for a deeper correction. Trade safely.
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.
