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Altcoins - Reasons to Be Cheerful: Market Analysis
Bitcoin is potentially on the brink of a surge to $100,000 and market sentiment is changing accordingly. However, the altcoins are still fairly flat in the main, so what might be in store for them?
DXY loses important price structure support
Source: TradingView
The US Dollar Index (DXY) is a good chart for crypto right now. When the dollar is strong this is generally not a good environment for crypto, while the inverse works just as well. The weekly chart above shows that the DXY has suffered a structural break to the downside. While there is the potential for a small recovery, it might be expected that the DXY will generally continue on down, providing a boost to risk assets such as the crypto market.
S&P 500 heading back above $6,000?
Source: TradingView
The S&P 500 is the chart of the top 500 companies in the US, and as such, is the most influential indicator of how the US, and by proxy, the world economy, is doing. Crypto will still follow the stock market most of the time, and therefore rising stock prices typically mean the same for crypto
The daily chart above shows that the price action formed a W pattern. The neckline for this has since been broken to the upside, and the measured move, should this play out, would take the price back above 6,000 points and not far from reentering the ascending channel.
USDT Dominance has more downside
Source: TradingView
Finally, the USDT Dominance chart (USDT.D) is showing a series of lower highs. Dominance has fallen out of the latest ascending channel, and the measured move can take dominance down to 4.54%. If USDT dominance is falling, this means that cryptocurrencies are rising against it
All of these charts point to a much more benign environment for crypto. Of course, things could happen in the global economy, or conflicts could escalate, but fortune is said to favour the brave …
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.