Quick Capitulation Coming for Altcoins? (XLM)
Wish I had posted this a bit earlier, but I just got home. In my last post, since XLM has held a previous downtrend as support (light blue), I figured it was showing some hidden strength. However, the entire altcoin market has started to look weak. It began with small caps like ENG and GVT breaking down from important support levels. The unease has crept into mid-caps, and now I think we may see it in Bitcoin and larger cap alts. The break of the bear trend for Bitcoin happened a little too soon, in my opinion, and the market got overheated.
This post is really about the entire market, but XLM is a pretty good indicator for market sentiment as a whole. If the red line can hold as support (currently around 2250), that would be a good sign. We need to see some serious buying happen soon in altcoins, or else the market will probably see a big drop. The good thing is, if you're bullish, this would present a great buying opportunity, as a lot of people are expecting an event like that to end the bear market once and for all. What's concerning to me though, is how close XLM and XRP are to long term support levels against Bitcoin and have shown no sign of a bounce. I've been bullish on them recently, but things are really starting to worry me.
That being said, every time I've felt this way recently, it's meant that a decent buying opportunity was coming, so you never know. The bullish scenario would be that this event is a bear trap for altcoin traders. But the market does scary at the moment. Just throwing this idea out there.
This is not financial advice. I am not a professional. This is just my idea, and it doesn't necessarily have to play out.
-Victor Cobra
This post is really about the entire market, but XLM is a pretty good indicator for market sentiment as a whole. If the red line can hold as support (currently around 2250), that would be a good sign. We need to see some serious buying happen soon in altcoins, or else the market will probably see a big drop. The good thing is, if you're bullish, this would present a great buying opportunity, as a lot of people are expecting an event like that to end the bear market once and for all. What's concerning to me though, is how close XLM and XRP are to long term support levels against Bitcoin and have shown no sign of a bounce. I've been bullish on them recently, but things are really starting to worry me.
That being said, every time I've felt this way recently, it's meant that a decent buying opportunity was coming, so you never know. The bullish scenario would be that this event is a bear trap for altcoin traders. But the market does scary at the moment. Just throwing this idea out there.
This is not financial advice. I am not a professional. This is just my idea, and it doesn't necessarily have to play out.
-Victor Cobra
Comment:
Right after posting this, we bounced right off the 2250 area and the red trendline. If we move up from here, this was likely the final shakeout before an alt rally. A sustained break below would negate any bullish view of XLM for the time being.
Comment:
Looks like the low volume could mean that we are experiencing a terminal shakeout after an accumulation range. I just posted a new analysis on NEO, comparing it with the terminal shakeout on ONT that occurred in early February. Here is the link:
