Published
3 months ago on
January 19, 2024
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Altcoins took another hammering on Thursday as heavy selling from the Grayscale Spot Bitcoin ETF forced the $BTC price lower. Many altcoins fared even worse as a result.
The crypto market is definitely going through a crisis of doubt ever since the Spot Bitcoin ETFs were approved last week. The Crypto Fear and Greed Index is currently at Neutral (51), which is a far cry from the Greed (74) of last month.
All the doubt probably stems from the worry that $BTC has now made its top and is about to descend into a sharp correction, and also, as added impetus for this, heavy selling in the Grayscale ETF is making its effect felt.
What next for the altcoins?
Altcoins are certainly feeling the brunt of all this concern and uncertainty, and where investors and traders were perhaps hoping to take advantage of a proper alt season, it hasn’t really materialised as yet, although that said, certain altcoins have already made their own spectacular runs.
Is this then the end of large upside gains for altcoins, or are we drawing to the end of the consolidation periods, in readiness for new surges to the upside?
Sideways consolidation
In trading it is commonly said that the longer the sideways period of consolidation lasts, the higher will be the eventual breakout when it comes. Some altcoins are currently in this consolidation phase, with many of these seeing sideways price action since November and December of 2023.
Source: Trading View
Injective (INJ) is an example here. The price has been in a range since mid-December, and Thursday’s red day has just brung the price back to the bottom of the range, from which it is now bouncing.
Source: Trading View
Chainlink (LINK) is another such example, with an even longer sideways consolidation period, which stretches back to early November of 2023.
Bull flags and triangles
Source: Trading View
No less bullish, are those altcoins that are seeing a more downward period of consolidation. Kaspa (KAS) has been following a downward path since around mid-November. However, this is a bullish pattern, and has turned into a large bull flag. A breakout from this structure could potentially send the price a lot higher.
Source: Trading View
Solana (SOL) is following a similar downward trajectory to $KAS, but this time in a triangle, which should break out within the next few days.
It may be that this particular altcoin season doesn’t take the form of previous ones, in that this time, most of the big price gains come from a select few of the more fundamentally sound cryptocurrencies.
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.
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