Bitcoin crashed down to $112,000 and the rest of the cryptocurrency market fell deeply into the red early on Monday. Is this the beginning of a larger bearish correction, or could this be a gift for those with the courage to buy at these lows?
Worth a punt on altcoins?
The crypto market is in turmoil once again. Bitcoin fell out of its ascending channel and looks as though it might come back to retest the $112,000 support again. A lot of altcoins are currently down 6 or 7%, with some down as much as 10%.
Bearing in mind that dips like these can be a great time to pick up some altcoins on the cheap, is it worthwhile entering the market in such a volatile and scary time, or could traders end up getting trapped if this dip still has a way to go?
Total2 hits strong supports
Source: TradingView
Total2 is the chart of the combined market capitalization of all cryptos, excluding $BTC. Some slight concern was already in this chart, given that a higher high had failed to be made on the daily. This resulted in the price struggling to hold the ascending trendline, and eventually a strong correction took place.
So could this be the start of a general roll over to much lower levels, or is this just a healthy reset for the altcoins? So far, given that the alts market cap fell to the 0.786 Fibonacci level before bouncing, and that currently the market cap is holding good support, it might appear that a bounce is more likely.
That said, even if this dip does get worse, there is very strong support at $1.53 trillion. This would be the level that would need to hold in order to avoid a spiral, possibly down to $1.4 trillion.
A rejection for Bitcoin dominance?
Source: TradingView
Bitcoin dominance (BTC.D) is another chart that must be consulted when deciding whether to enter altcoins. The daily chart above reveals how the price has been below the long-time trendline (stretching back to late 2022) for quite some time now. Also, a small rally looks as though it might be about to be rejected at 58.8%. Looking left, this level is a good resistance line, so this looks to be in favour of the altcoin bulls.
Potential entry for $SOL
Source: TradingView
So which are the best entries for altcoins? $SOL might be one of them. The price has made a good healthy correction and came all the way down to nearly touch the $210 horizontal support, and the 0.786 Fibonacci level. As it is, the price looks to be holding at the convergence of the $220 horizontal support, the 0.618 Fibonacci level, and the ascending trendline. With such convergence, this is a very likely level for a bounce.
$DOGE at the end of a healthy correction?
Source: TradingView
Moving further out onto the risk curve, $DOGE looks to be in a decent position right now. The price fell all the way to the ascending trendline, marking an almost 25% correction, which is potentially a very healthy dip at this stage.
Now the $DOGE price is holding the bottom of a strong band of horizontal support. If this can continue to hold until the market turns this would be a good sign.
Finally, the Stochastic RSI at the bottom of the chart is showing the indicator lines falling quickly to the bottom. Once there, they should reset and start to climb back up again, potentially providing upside price momentum as they go.
