Here are 3 altcoins that could surge once Bitcoin flips $35K to support

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Here are 3 altcoins that could surge once Bitcoin flips $35K to support
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Bitcoin (BTC) and the broader cryptocurrency market are taking a breather after the May 31 rally. Meanwhile, most altcoins remain severely oversold, most 70% to 90% below their all-time highs.

Altcoin Index Total Market Cap

It was obvious that there was fear everywhere, blood in the water. Global risk markets are suffering, but it is these conditions that create opportunities for professional funds to accumulate and increase positions.

Let’s take a look at three altcoins that could rally if the broader market enters a new uptrend.

ADA could surge by 80%

Cardano (ADA) will soon have a very bullish update. The much-anticipated Vasil hard fork, scheduled to launch in June, will improve performance and add more Plutus enhancements.

okex

From a price action standpoint, ADA is in a strong price range, which could support any further gains Dapan experiences. In the Ichimoku Kinko Hyo system, ADA has maintained a clear gap between the body of the last three weekly candlesticks and Tenkan-Sen.

Corrections usually occur within three to four days when there is a clear gap between the candlestick and the body of the Tenkan-Sen. This is because the equilibrium is out of sync and Tenkan-Sen and price action like to stick together as much as possible. When one strays too far from the other, a return to Tenkan-sen is highly likely.

ADA/USD Weekly Ichimoku Kinko Hyo Chart Source: TradingView

However, if the broader cryptocurrency market sees a sharp rally, ADA price could break above Tenkan-Sen to test Kijun-Sen. ADA has not tested weekly Kijun-Sen since the week of November 8, 2021.

Weekly Kijun-Sen is $1.02, containing the 2021 volume control point and the 50% Fibonacci retracement of the all-time high to the Jan. 25, 2021 low.

ADA/USD weekly chart (Binance) Source: TradingView

RELATED: Bitcoin May Hit $14,000 in 2022, But Buy BTC Now to ‘As Good As Possible’: Analyst

MATIC has a target price of $1

Looking at the weekly chart of Polygon (MATIC), one can’t help but notice that it is strikingly similar to ADA. Both MATIC and ADA have sold off from $3 and both are stuck in the mid-$0.50 to $0.60 price range, but that’s where the similarities mostly end.

Fundamentally, MATIC remains strong. With governments around the world trying to restrict or ban mining due to the prohibitive energy costs of proof-of-work blockchains, MATIC may avoid government scrutiny and attract supporters as a positive example of environmental stewardship.

Polygon (MATIC) Source: Twitter

Like ADA, MATIC has a significant gap between the body of its weekly candlestick and Tenkan-Sen. Although, the gap in MATIC is more significant. Again, the gap between price and Kijun-Sen is more meaningful.

In the Ichimoku Kinko Hyo system, there is a maximum mean, that is, the price moves away from Kijun-Sen before going through a violent mean reversion. For MATIC, the threshold is 63%.

MATIC/USD weekly chart (Binance) Source: TradingView

Any fresh bullish momentum in Bitcoin could cause MATIC to lead the altcoin higher until it reaches the $1.00 to $1.15 value area around the weekly Tenkan-Sen.

XLM lags the altcoin market, but has a reputation for surprises

It’s sometimes hard to forget that during the last major bull run from the COVID crash to November 2021, there were a few major altcoins that didn’t make new all-time highs. Stellar (XLM) is one of them. In fact, the last time XLM reached an all-time high was the week of January 8, 2018, almost four and a half years ago!

One thing about XLM that other weekly charts don’t have is a very clear falling wedge pattern. Of the standard rectangle and triangle patterns in technical analysis, the wedge pattern is the most powerful. What makes the wedge so strong is a possible false breakout.

XLM/USD weekly chart (Binance) Source: TradingView

The most likely direction of the falling wedge is higher – but a break below the falling wedge could create a strong shorting opportunity. The typical behavior of analysts and traders expecting to see a failed falling wedge is an immediate and rapid sell-off, but so far the bears have been unable or unwilling to do so.

Conversely, XLM’s weekly chart shows that counterfeiting is very likely. If bullish momentum returns to the cryptocurrency market, XLM could hit the second peak of the falling wedge near $0.38.

Classic technical analysts believe that technicals lead fundamentals. If true, altcoins like XLM, MATIC, and ADA could be in very ideal conditions for any new bull run.

However, downside risks remain worrisome, but they are likely to be extremely limited. If a new uptrend fails to materialize by the end of June, the cryptocurrency market could trade sideways until a major breakout occurs in the fall.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk and you should do your own research when making a decision.



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