Altcoins
Is It Time to Buy? Bitcoin RSI Points to Opportunity
- Bitcoin’s RSI has indicated potential rebounds for the altcoin market, particularly RUNE, RNDR, and ADA.
- Despite the market lows, technical analysis suggests that some altcoins may offer promising investment opportunities.
The cryptocurrency market, especially the altcoin sector, has seen a significant decline after reaching a peak market capitalization of $1.28 trillion in March.
Recently, the market capitalization fell below the $1 trillion mark, signaling a bear market that has left many investors cautious.
Bitcoin RSI says BTFD
However, this period of decline could also present buying opportunities, as indicated by major technical analyzes from well-known cryptocurrency analysts.
Sheldon The Sniper, a highly respected figure in the cryptographic analyst community, has highlighted how Bitcoin’s Relative Strength Index (RSI) can be used to identify potential buying zones.
This includes altcoins like THOR Chain [RUNE], Render token [RNDR]AND Cardano [ADA].
According to Sheldon, when Bitcoin’s RSI falls below certain levels, it often precedes rises in certain altcoins.
This has been observed with stocks such as RUNE and ADA, which historically show strong rallies when RSI readings drop below 40% on weekly charts.
This suggests that despite the broader market struggles, there are pockets of potential that could prove valuable to discerning investors.
At the time of writing, Bitcoin was trading at $60,746, down 1.5% over the past 24 hours, and its RSI had reached a critical zone that could signal an impending shift in market sentiment.
Altcoin Analysis: Cardano as a Case Study
While Sheldon highlighted RUNE, RNDR, and ADA as potential buys, it would make sense to delve into just one of these altcoin fundamentals to see if they truly present attractive investment opportunities.
Now, let’s take Cardano as a case study. Data from Santiment indicated that Cardano’s daily active addresses have significantly decreased, going from 36,000 on June 24 to just under 8,000 recently.
This sharp reduction suggested a decrease in network activity, which could have a negative impact on the price of ADA.
Source: Sanctimonious
Also, IntoTheBlock data reveals that large investors, or whales, may currently find ADA less attractive.
The number of transactions above $100,000 has fallen from 7,000 on June 24 to 4,000 as of this writing, signaling a potential withdrawal of investor interest.
Source: IntoTheBlock
This trend is reflected in the Open Interest of the asset, which, according to Coin glassdecreased by 2.74% in the last day to $203 million.
In contrast, there was a significant increase in Open Interest volume, which rose nearly 50% to $307 million, indicating mixed market signals.
Source: CryptoQuant
Light That of Bitcoin [BTC] Price forecast 2024-25
These downward trends in key metrics not only suggested a price decline, but also put approximately 74% of ADA holders in the red, as reported by AMBCrypto.
This situation raises a crucial question: will this lead to increased selling pressure?