Altcoins
Altcoin Market Cap Holds $850 Billion Support, Next Resistance at $1.2 Trillion ⋆ ZyCrypto
The overall altcoin market capitalization (all cryptocurrencies excluding Bitcoin) has been volatile for most of the past few weeks. The secondary cryptocurrency market, often criticized for its volatility, lived up to its reputation by posting a 20% decline in the first five days of this month before recovering strongly in the last 72 hours. However, it successfully defended its $850 billion valuation before recovering above $950 billion yesterday.
This rollercoaster ride in the secondary market has been a key factor in the cryptocurrency market’s recent descent into Fear, Uncertainty and Doubt (FUD). The bullish enthusiasm generated by Bitcoin Exchange Traded Fund (ETF) spot January’s approval has largely dissipated. Bitcoin, the largest cryptocurrency by market cap, was expected to hold above $60,000 for the foreseeable future before an eventual recovery in the third and fourth quarters of this year. Since the altcoin market typically follows the gains of the leading digital currency, it was also expected to remain sluggish.
Altcoins Respond to Selling Pressure
anyway, the The German Government’s Surprising BTC Sale and the Mt. Gox compensation payment rocked the market at the end of the second quarter. Cautiously entering July, the digital currency space witnessed a dramatic sell-off, with BTC plunging below $54,000 within a week. The secondary market fared even worse, dragged down by Bitcoin’s decline. Fortunately, both markets managed to stabilize and partially recover by the end of the second week.
Here is a chart of the altcoin market since the beginning of the month:
However, if we broaden our gaze to better understand the situation, here is the graph from mid-2021:
Second According to renowned cryptocurrency analyst Michael Van de Poppe, the altcoin market has set a long-term low around $500 billion and is unlikely to test this level anytime soon. However, the local low is around $850 billion and bulls will likely mount their defense soon if the resulting bearish forecasts are to be believed.
Further price corrections
At its current price of $59,900, a further drop in Bitcoin to $50,000 would likely trigger significant losses in altcoins as well. In this scenario, the secondary market is expected to maintain a valuation of $700 billion, which could translate into losses of up to 30% in altcoins. However, if the market can withstand strong selling pressure, it could stabilize above $850 billion. Next resistance level stands at $1.23 trillion, which it reached in early April. A surge beyond this point could usher in a new altcoin era and potentially new all-time highs.