Best Time to Sell Altcoins? - Crypto Market Analysis

The altcoins have been slammed over the past few days, and many investors may have already sold their holdings. However, is this the best time to sell? Or is there a chance that altcoins can still make a comeback?

Too many new cryptocurrencies are diluting the altcoin market

The first thing to bear in mind when dealing with altcoins, is that during this bull market, many hundreds of thousands of new cryptocurrencies have been launched. Many of these will probably have gone directly to zero, but value will probably still be tied up in some of them.

This has probably led to some dilution of the cryptocurrency market cap as a whole, whereby a lot of the altcoins that were around for the last bull market of 2021 have seen very little upside, if any, for this particular bull market.

This has meant that some of the cryptocurrencies that were well-backed in 2021 have been generally downtrending and bleeding out since that time.

Retail traders are embracing new phenomenon

Also, a new phenomenon has emerged whereby certain cryptocurrencies, usually memecoins, have been launched, and they have absolutely sky-rocketed, before coming down to earth with a bang, often within a period of just a few hours. Of course, this type of trading behaviour has always been the case since the advent of memecoins, but it is far more exclusive to new memecoin entrants now.

The relatively recent $TRUMP and $MELANIA memecoins were two such examples, and the more recent $LIBRA cryptocurrency was another.

Retail traders appear to be preferring to back such cryptocurrencies rather than sitting on serious altcoins that may take a long time to mature and go up in price. The chance of cashing in big on the next memecoin to go parabolic could be the new preferred way for retail traders to go.

Bitcoin can float a lot of boats

That said, what about those who are still holding altcoins? Is it time to sell, or could there still be a surprise in store?

Bitcoin is the tide that can float all boats. That said, perhaps its better to say a lot of boats. While the vast majority of cryptocurrencies will undoubtedly go to zero, there are projects out there that are working furiously to innovate on finance and other market segments. If they can survive this bull market, and more to the point, the approaching bear market, who knows what they can achieve.

Back to the present, can some of the leading altcoins still have a comprehensive spike back to the upside? If Bitcoin has a huge bounce, then why not?

Altcoin trend is still up

Source: TradingView

Total2 is the chart for the combined market capitalisation of all cryptocurrencies except $BTC. Therefore, it gives a decent overview of how the altcoin market is doing.

It can be seen that the $1.25 trillion level has now become resistance. However, the top of the bull flag, and the horizontal level at $1.18 trillion are providing strong support.

If the market cap were to fall below, and flip this support into resistance, then the writing could well be on the wall. On the other hand, if Bitcoin takes off again, and altcoins follow, breaking and confirming above the $1.25 trillion resistance would put all upside possibilities back on the table again.

Finally, this is all dependent on how altcoins perform against the US dollar. For the best estimation of an altcoins value, one needs to compare it with its $BTC pair. Very few altcoins have outperformed $BTC thus far in the bull market. Is yours one of them?

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Text source: Crypto Daily™

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