Mags highlighted that if the altcoin market cap declines below its present support level, it could retest the 2017 all-time high zone around $240 billion. This area represented the peak of the last crypto bull market cycle and would now act as strong monthly support.
A drop to $240 billion would require a 25% fall from the current level. It would also take the altcoin market cap back to levels not seen since the beginning of 2021. However, Mags suggests this zone could catch the fall and stabilize the market.
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Bullish Breakout Above Resistance
On the flip side, Mags’ second scenario sees the altcoin market cap breaking out above nearby trendline resistance instead. If bulls can front-run the major monthly support at $240 billion and push the market cap higher, he believes an aggressive uptrend could follow.
This would require the combined value of alternative cryptocurrencies to begin outpacing Bitcoin’s market dominance once again. Bitcoin dominance recently surged to multi-year highs above 47% as altcoins lagged behind BTC’s performance.
Critical Decision Point for Altcoin Market
Nonetheless, Mags highlights the altcoin market is at a critical decision point. A bearish breakdown or bullish breakout likely depends on whether $320 billion holds as key support. If it fails to hold, traders may scramble for the major support lower down.
With altcoins like Ethereum down over 65% from all-time highs, many investors are anxious to call a bottom. However, chartists like Mags advise caution until definitive technical signals appear.
The future direction will be determined by how the market behaves around the $320 billion level in the coming weeks and months. All eyes are on the altcoin market cap chart to see whether a bearish retest or bullish rally emerges next.
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