CoinJewel News Report:
Bitcoin’s RSI indicates a potential rebound in the altcoin market, especially for RUNE, RNDR, and ADA. Despite the market being in a slump, technical analysis suggests that select altcoins may offer promising investment opportunities.
The cryptocurrency market, particularly the altcoin industry, experienced a severe downturn after reaching a peak market cap of $1.28 trillion in March. Recently, the market cap has dropped below the $1 trillion mark, signaling a bearish phase that has kept many investors cautious.
However, as highlighted by key technical analysis from renowned cryptocurrency analyst Sheldon The Sniper, this period of decline could also present buying opportunities. Sheldon emphasizes how Bitcoin’s Relative Strength Index (RSI) can be used to identify potential buying areas.
This includes alternative coins such as THORChain (RUNE), Render Token (RNDR), and Cardano (ADA). Sheldon states that when Bitcoin’s RSI drops to specific levels, it usually precedes an uptick in select altcoins.
RUNE and ADA have also observed this trend, exhibiting strong recoveries historically when their RSI readings on the weekly chart fall below 40%. This suggests that despite the overall challenging market conditions, there are still potentials for astute investors to benefit.
At the time of writing, Bitcoin’s trading price stands at $60,746, marking a 1.5% decline in the past 24 hours. Its RSI has reached a critical zone, potentially indicating an imminent shift in market sentiment.
Analyzing altcoins: A Case Study on Cardano
While Sheldon highlights RUNE, RNDR, and ADA as potential acquisition targets, it makes sense to delve into the fundamental aspects of one of these altcoins to verify if they truly offer attractive investment opportunities.
Now, using Cardano as a case study. Data from Santiment reveals a significant decrease in Cardano’s daily active addresses, dropping from 36,000 on June 24 to below 8,000 recently. This sharp decline indicates reduced network activity, which could have a negative impact on ADA’s price.
Furthermore, data from IntoTheBlock shows that large investors or whales may currently find ADA less appealing. The trading volume for transactions exceeding $100,000 has decreased from 7,000 on June 24 to 4,000 at the time of writing, suggesting a waning interest from investors.
This trend is reflected in the asset’s open interest contracts, which, according to Coinglass data, have declined by 2.74% in the past day, reaching $203 million. In contrast, the trading volume for outstanding interest has increased significantly, surging nearly 50% to $307 million, indicating mixed market signals.
Read Bitcoin’s [BTC] Price Predictions for 2024-25
According to an AMBCrypto report, the downward trend in these key indicators not only signifies price declines but also puts approximately 74% of ADA holders in a state of loss. This raises a crucial question: Will this lead to increased selling pressure?