The altcoin market cap (ALTCAP) has created a bullish pattern just above the $760 Billion support area and could soon initiate an upward movement.
On November 10, the total market capitalization of altcoins hit a new all-time high of $1.31 trillion. However, it has been declining ever since.
ALTCAP has fallen below the previous all-time high resistance area of $970 billion, rendering the previous breakout as a deviation (red circle). The $970 area is now acting as resistance once more, most recently causing a rejection in December.
Currently, ALTCAP is trading just above the $760 billion support, which is both a horizontal support zone and the 0.5 Fib retracement support level. Due to the confluence of these factors, this is a very strong level of support.
Future movement
Trader @PrinceofElliott tweeted an ALTCAP chart, stating that it is likely to resume its downtrend in the near future towards $400 billion. However, he suggests an upward movement will transpire prior to the decrease.
A closer look at the daily chart fits this assessment.
ALTCAP created a double bottom above the $760 billion support zone. The double bottom is considered a bullish pattern, which means it often leads to upward moves.
Furthermore, the pattern has been combined with bullish divergences in both the RSI and MACD (green lines). Such divergences often precede upward movements. The fact that they are transpiring alongside a bullish pattern further supports the possibility that an increase will follow.
A break of the descending resistance line in place since November 10 would confirm that the upward move has begun.
In that case, an ALTCAP upward movement towards the $970 billion resistance area would be the most likely scenario.
