Altcoin Prices Tumble: Identifying Support Levels for Optimal Purchases
With Bitcoin continuing its downward trajectory and the U.S. stock market potentially opening to turmoil later on Monday, the outlook for altcoins appears bleak, at least in the near future. How much further can they decline, and where are the most promising support levels to consider buying for a potential rebound?
Buying Small Cap Altcoins: A Risky Endeavor
Holding onto altcoins right now feels like a challenging ordeal. Some have already suffered losses exceeding 10%, and that's just in the early hours of Monday trading. Investors might be caught off guard, sparking a chain reaction of selling.
When it comes to purchasing, going for smaller market cap altcoins feels like trying to catch a knife mid-fall. It might be wiser to wait for the U.S. stock market to open later on Monday to gauge its impact on cryptocurrencies moving forward.
Is the Altcoin Market Cap at a Strong Support Level?
Source: TradingView
Examining the Total3 chart, which shows the total market cap of all cryptocurrencies, excluding $BTC and $ETH, reveals that the price has slipped out of a small triangle and reentered a larger wedge pattern. It's currently holding onto horizontal support at $973 billion, and a bounce might occur here or possibly at the bottom of the wedge.
$ETH's Potential Inverse Head and Shoulders Formation
Source: TradingView
For those considering altcoin purchases, large caps offer more security, and with $ETH having reached the significant $3000 horizontal support, this might be an attractive entry point. An inverse head and shoulders pattern could be forming, which might elevate the price to just below $4,000. Should the decline persist, the next strong support lies at $2,700.
Will $SOL Reach $183?
Source: TradingView
Next up is Solana $SOL, another large cap with potential opportunities. If we consider the measured move from the triangle, it could drive the price down to the deepest support level shown above, at $183. While it's uncertain if the price will fall that low, the reaction of the U.S. stock market upon opening might make $183 a potential target.
$SUI Drop Might Offer Great Buying Opportunities
Source: TradingView
Lastly, we evaluate the price of $SUI. While not as prominent as $ETH or $SOL, $SUI is likely now a large cap altcoin and has experienced substantial growth in recent months.
As shown in the daily chart above, the price has successfully tested the 0.382 Fibonacci level. If the stock market has a particularly bad day on Monday, $SUI might drop to the 0.5 Fibonacci at $2.92, or even the 0.618 Fibonacci at $2.34. The latter could represent an excellent buying opportunity.
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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