Will An Ascending Trendline Bring a Return of Altcoin Apocalypse?
Altcoins across the crypto market have been outperforming Bitcoin by a large margin. The trend kicked off while the first-ever cryptocurrency traded sideways – something analysts say is the best environment for altcoin dominance to thrive.
But just as Bitcoin’s consolidation phase has ended, the total altcoin market cap has run into strong ascending trendline resistance. Could a rejection here bring a return to the altcoin apocalypse?
Alt Season Causes Top Crypto To Outperform Bitcoin By More Than Double The ROI
Bitcoin is up over 60% year to date. Meanwhile, its next closest competitor and top altcoin Ethereum is up well over 200% during the same time period. When other cryptocurrencies outperform Bitcoin for an extended timeframe, its referred to as an altcoin season.
The crypto hasn’t had one of these phases for over a year, until recently. Prior to the current altcoin season, the alternative cryptocurrencies spent most of 2019 in the gutter. Bitcoin’s explosive parabolic rally left alts in its dust.
Related Reading | Easy Money? Coinbase Crypto Coins Grow Over 50% On Average In August
But after an extra year of drawdown, these same battered and beaten assets are recovering much faster in 2020 than the first-ever cryptocurrency has. After topping out in early 2019, Bitcoin’s dominance caused an altcoin apocalypse, prompting widespread capitulation in the asset class.
Alts made a strong recovery in early 2020, but fear surrounding the pandemic caused the assets to double-bottom this March. Since then, most altcoins are up a hundred percent or more. Some, have grown several hundred percent since the start of the year, such as Chainlink, Band, and numerous DeFi tokens.
But according to an ascending trendline and recent rejection, powerful resistance may bring a return to the altcoin apocalypse before things finally improve.
TOTAL 2 Alt Market Cap Weekly Ascending Trendline | Source: TradingView
Altcoin Apocalypse To Return, According To Ascending Trendline, BTC Dominance
Support and resistance can exist horizontally, or diagonally, following a trendline. Trendlines can be ascending or descending, with most downtrends being locked within a descending trendline acting as strong resistance.
Once that downtrend line breaks, however, there’s often an explosive rally as we’ve witnessed all across the crypto market. However, trendlines can also be ascending, and while these often act as support, they too can act as powerful resistance.
Related Reading | Bitcoin Dominance Readies Deadly Blow Against Altcoins, Indicator Says
That’s exactly what may be putting a stop right now to the recent altcoin rally, according to the total crypto market cap sans Bitcoin. Bitcoin dominance has been signaling a strong reversal in the metric that weighs the first-ever crypto against the rest fo the industry.
TOTAL 2 Alt Market Cap Monthly Ascending Trendline | Source: TradingView
It may have been an early warning that alt season was over, and an alt apocalypse was about to begin. This same trendline acted as the top in 2019 and may be doing so once again. A similar ascending trendline is visible on both monthly and weekly timeframes, drawn across different peaks and troughs over the last few years of the bear market.
The trendline at this point is clearly valid, but will it continue to keep alts at bay a while longer?