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With Bitcoin still falling, and the U.S. stock market opening in a potential panic later on Monday, the prognosis for the altcoins is probably quite grim, at least in the short term. How far can they fall, and where might be the best support levels to buy a possible bounce?
Buying small cap altcoins like trying to catch a falling knife
Holding altcoins is not an enjoyable experience right now. Some are already reaching a more than 10% loss, and this is still in early trading on Monday. Investors are going to wonder what hit them, and a snowball selling effect could start to happen.
As far as buying goes, if it’s any of the smaller market cap altcoins, this would be tantamount to trying to catch a falling knife. One would arguably be better off waiting for the U.S. Stock market to open later on Monday, and seeing how this is likely to affect crypto going forward.
Has the altcoin market cap hit a good enough support?
Source: TradingView
Looking at the Total3 chart, which tracks the combined market cap of all cryptocurrencies, excluding $BTC and $ETH, it can be seen that the price dropped out of the small triangle, and reentered the much larger wedge pattern. Currently holding on to horizontal support at $973 billion, either a bounce will occur here, or possibly at the bottom of the wedge.
$ETH inverse head and shoulders pattern
Source: TradingView
For buying the altcoins, the large caps are going to be the safest, and with $ETH already reaching the major $3000 horizontal support, this could be a good area to start buying. An inverse head and shoulders pattern could also be about to play out, potentially taking the price back to just under $4,000. If the downside onslaught does continue, the next strong horizontal support is at $2,700.
Could $SOL hit $183?
Source: TradingView
Solana $SOL is the next large cap where possibilities beckon. Taking the measured move out of the triangle would send the price exactly down to the deepest support on the chart above, at $183. That’s not to say that the price will get down there, but depending on how badly the U.S. stock market reacts when it opens, depends on whether $183 could actually be a possibility.
$SUI plunge could provide excellent entry points
Source: TradingView
Finally, we consider the price of $SUI. Although this is not in the league of $ETH or $SOL, it is probably now a large cap altcoin, and it has seen some fantastic growth over recent months.
As can be seen in the daily chart above, the price has come down to make a beautiful test of the 0.382 Fibonacci. If the stock market does put in a really bad day on Monday, there is the possibility that $SUI could come down to the 0.5 Fibonacci at $2.92, or even the 0.618 Fibonacci at $2.34. The latter could be an excellent entry level.
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.
