Altcoin
Is it time to buy? Bitcoin’s RSI indicates opportunities
- Bitcoin’s RSI has been pointing to potential rebounds for the altcoin market, especially RUNE, RNDR, and ADA.
- Despite the market lows, technical analysis suggests that some altcoins may offer promising investment opportunities.
The cryptocurrency market, especially the altcoin sector, has seen a significant decline after reaching a peak market capitalization of $1.28 trillion in March.
Recently, the market cap fell below the $1 trillion mark, signaling a bear market that has left many investors cautious.
Bitcoin RSI says BTFD
However, this period of decline can also present buying opportunities, as indicated by key technical analyzes from leading crypto analysts.
Sheldon The Sniper, a highly regarded figure in the cryptographic analysis community, has done so highlighted How Bitcoin’s Relative Strength Index (RSI) can be used to identify potential buy zones.
This includes altcoins like THORChain [RUNE], Render token [RNDR]AND Cardano [ADA].
According to Sheldon, when Bitcoin’s RSI drops to certain levels, it often precedes rallies in select altcoins.
This has been seen with the likes of RUNE and ADA, which historically show strong recoveries when their RSI readings dip below 40% on weekly charts.
This suggests that despite the broader market struggles, there are pockets of potential that could prove valuable to discerning investors.
At the time of writing, Bitcoin was trading at $60,746, down 1.5% over the past 24 hours, and its RSI had reached a critical zone that could indicate an imminent shift in market sentiment.
Altcoin Analysis: Cardano as a Case Study
While Sheldon highlighted RUNE, RNDR, and ADA as potential buys, it would make sense to delve deeper into the fundamentals of one of these altcoins to see if they truly represent attractive investment opportunities.
Now, let’s take Cardano as a case study. Data from Santiment indicated that Cardano’s daily active addresses have significantly decreased, going from 36,000 on June 24 to just under 8,000 recently.
This sharp decline suggested a decrease in network activity, which could negatively impact the price of ADA.
Source: Sanctimonious
Also, IntoTheBlock data reveals that large-scale investors, or whales, may currently find ADA less attractive.
The number of transactions over $100,000 has fallen from 7,000 on June 24 to 4,000 as of this writing, signaling a potential retreat in investor interest.
Source: IntoTheBlock
This trend is reflected in the asset’s Open Interest, which, according to Coinglassfell 2.74% over the past day to $203 million.
On the contrary, there was a significant increase in the volume of Open Interest, which increased by almost 50% to reach $307 million, which indicates mixed market signals.
Source: CryptoQuant
Light That of Bitcoin [BTC] Price forecast 2024-25
These downward trends in key metrics not only suggest a price decline, but have also led to approximately 74% of ADA holders losing money, as reported by AMBCrypto.
This situation poses a critical question: Will this lead to increased selling pressure?