Date: Fri, Dec 20, 2024, 09:38 AM GMT
Over the past 48 hours, the cryptocurrency market has been under significant selling pressure as Bitcoin (BTC) dropped to $95,000 after recently hitting a record high of $108,000. This decline comes amid growing market uncertainty following the Federal Reserve’s latest announcements.
Amid Bitcoin’s retracement, altcoins are bearing the brunt of the sell-off, with Fantom $FTM and Ethena $ENA leading the losers' list. Both coins have suffered over 20% declines in the last 24 hours, raising concerns among investors about the sustainability of altcoin rallies.
Source: Coinmarketcap
Total 3 Chart Analysis
The Total 3 market cap chart, which excludes Bitcoin and Ethereum, paints a concerning picture. Currently consolidating within a descending triangle pattern, the total altcoin market cap has fallen from its recent high of $1.08 trillion to $884 billion.
Key support lies at $850 billion, and if this level is tested and holds, there is potential for a reversal that could spark a recovery rally in altcoins. However, if this support breaks, further downside could ensue.
From a technical perspective, the MACD indicator is showing bearish momentum, while the RSI has dipped into oversold territory. These signals suggest that while selling pressure remains strong, a potential bounce could be on the horizon if the market finds solid support.
BTC Dominance Chart Analysis
Bitcoin’s dominance over the market has risen sharply, standing at 59.77%, after bouncing back from the lower trendline support of 54.50%. This sharp rise indicates a shift of capital away from altcoins back into Bitcoin during the current market turbulence.
The dominance is now testing a significant resistance zone near 60%. If BTC dominance gets rejected from this level, it could pave the way for an altcoin recovery, as traders might rotate funds back into altcoins.
However, if BTC dominance breaks above 60%, it could signal continued weakness in the altcoin market as Bitcoin attracts the lion’s share of capital.
Will the Downtrend Reverse?
For altcoins to recover from the ongoing sell-off, two conditions must align:
The Total 3 market cap must find support at $850 billion and reverse upward.
Bitcoin Dominance must face rejection at its current resistance at 60%, potentially falling back toward the lower support level of 54.50%.
While the charts suggest potential for a rebound, much depends on external factors, including Bitcoin's price stability and broader market sentiment following the Federal Reserve’s recent announcements.
Disclaimer: This article is for informational purposes only and not financial advice. Always conduct your own research before investing in cryptocurrencies.
