Extreme Fear Grips Altcoins As 90% Of Tokens Trade Below 200DMA: Perfect Time To Accumulate?
Altcoins proceed to face heavy stress throughout the board after the historic crash that shook the crypto market on Friday. The sudden sell-off triggered the biggest liquidation occasion in crypto historical past, wiping out billions in leveraged positions inside minutes. Even established blue chips reminiscent of Chainlink (LINK) and Avalanche (AVAX) noticed their costs plunge greater than 60% earlier than partially recovering over the weekend.
While costs have since stabilized at barely greater ranges, investor confidence stays fragile. The market remains to be reeling from the shock, and merchants are cautious as volatility persists. According to prime analyst Darkfost, the present market construction displays deep disinterest and capitulation. He shared knowledge displaying that solely 10% of altcoins listed on Binance are buying and selling above their 200-day shifting common — which means that 90% of the altcoin market is beneath its long-term development.
This excessive studying highlights the magnitude of the sell-off and the shortage of sturdy restoration momentum thus far. Historically, such setups typically precede accumulation phases, as sensible cash begins to place for the subsequent cycle. However, with sentiment nonetheless fragile, the approaching days will decide whether or not it is a true bottoming zone or just a pause earlier than one other leg down.
Market Exhaustion Could Signal the Next Rebound
Darkfost explains that the present state of the altcoin market has traditionally marked moments of capitulation and alternative. Throughout this cycle, related configurations have occurred 3 times, every adopted by a notable short-term rebound throughout main altcoins. These durations of utmost promoting exhaustion typically symbolize factors the place draw back momentum fades, and affected person buyers start accumulating high-quality belongings at deep reductions.
Darkfost emphasizes that these setups hardly ever final lengthy. Once market sentiment stabilizes and merchants acknowledge the extreme worry priced into altcoins, capital tends to circulate again shortly, driving sturdy aid rallies. However, he warns that this isn’t a time for indiscriminate shopping for. The key, he says, lies in specializing in initiatives which have maintained liquidity, developer exercise, and on-chain utilization even amid the broader downturn. These components typically separate long-term survivors from speculative tokens that can wrestle to get well.
For buyers who missed earlier market cycles, one of these configuration might current some of the favorable risk-reward setups in months. Yet timing stays essential. As Darkfost notes, as soon as the market realizes it has overcorrected, re-entry alternatives disappear shortly, typically changed by aggressive upward strikes that reward those that acted decisively throughout peak worry.
Altcoins Face Critical Support Test
The complete crypto market cap excluding the highest 10 belongings — a key indicator of broader altcoin efficiency — is at the moment hovering round $263 billion, reflecting a 2.3% decline over the week. This chart paints a transparent image of stress throughout the altcoin sector following final week’s market-wide crash, with costs retracing sharply from the $285 billion space after being rejected close to multi-month resistance.
Technically, the market cap stays above the 200-week shifting common (purple line), which has acted as a dependable help stage all through earlier cycles. However, the latest volatility and lengthy draw back wick spotlight sturdy promoting stress, suggesting that many buyers have been pressured to de-risk amid uncertainty. The 50-week MA (blue) and 100-week MA (inexperienced) are at the moment flattening, signaling the potential for a protracted consolidation section earlier than any sustainable restoration begins.
Historically, this construction — a deep correction into main shifting averages — typically precedes accumulation phases that mark macro bottoms. As lengthy because the $250 billion stage holds, the broader altcoin market might stabilize and steadily rebuild momentum. A weekly shut beneath this help, nonetheless, would possible set off one other wave of liquidations, doubtlessly retesting the $200 billion area — a stage related to earlier cycle lows.
Featured picture from ChatGPT, chart from TradingView.com
