As Bitcoin (BTC) Charges On, This AVAX Metric May Signal Price Dips for Altcoins – But There’s a Catch
Cryptocurrency analyst Altcoin Sherpa warned regarding the potential for heavy capitulation across the altcoin market if key support levels fail.
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AVAX Chart Signals Broad Market Troubles
In a tweet post, he highlighted Avalanche’s AVAX token as an important chart to monitor, cautioning that a decisive breakdown could spark a crisis of confidence rippling across cryptos broadly.
“It’s going to be important to see where the next overall low is printed for some of these altcoin charts,” he wrote. “Peep coins like $AVAX: If this was a recent lower high and we hit a lower low (see $26 get taken out), I think it could be scary overall.”
After hitting ATHs above $140 last November during the heights of the Avalanche network’s growth, AVAX has retraced over 80%. It briefly bounced off the $26 level earlier this month before revisiting that zone this week. According to Altcoin Sherpa, if AVAX drops decisively below $26, it could spark capitulation across the wider crypto market.
Bitcoin Could Decouple From Floundering Alts
However, he explained that Bitcoin could trend higher or chop sideways even with altcoins plunging, a pattern that has played out severally. “You CAN see altcoins go down in USD value even when $BTC is going higher,” he reminded followers, linking to a chart showcasing this effect.
Nonetheless, Altcoin Sherpa believes certain emerging ecosystems like leading AI and Web3 projects may continue posting positive returns regardless of conditions. He cited interoperability upstart Ondo Finance as one such outlier primed to outperform.
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Show more +Altcoin Sherpa fears the market could be severely impacted if critical support levels collapse. However, he holds a pragmatic long-term bullish outlook on the prospects of cryptocurrencies. Still, he warns that traders concentrated on altcoins apart from Bitcoin may face substantial volatility in the months ahead.
With altcoins hovering at critical technical zones, traders may want to position defensively while keeping a keen interest in market trends. As Altcoin Sherpa noted, profitable opportunities will likely persist for savvy investors willing to take a contrarian stance if fear takes hold.
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