The altcoin market maintains it’s current bullish position. Even if prices do drop from the present value area, there are significant support levels below.
TOTAL2 Chart (Cryptocurrency Market Cap minus Bitcoin)
The Ichimoku Kinko Hyo system is one of my preferred trading systems and one that I use daily. Like any successful and worthwhile endeavor, an investment in time is necessary before one can be proficient with this system. When one does become proficient, then one can very quickly determine whether a trade is available or not. The Ichimoku system can also provide a profound analysis of the underlying price action structure and how this structure is related to other time frames.
The chart above is Tradingview’s TOTAL2 cryptocurrency chart. The TOTAL2 is often referred to as the ‘altcoin’ market because it is a chart of the aggregate cryptocurrency market minus Bitcoin. While it may sound odd to say it, the altcoin market is the ‘speculative’ side of the cryptocurrency market. The altcoin market is a measure of how bullish future investors and speculators are on the entire cryptocurrency sphere. I have found that an aggregate chart of the altcoin market provides a kind of leading indicator for Bitcoin and the whole market. Before any sustained and new bull trend occurs, the altcoin market will generally experience a substantial rise before Bitcoin and will outperform Bitcoin consistently. We have yet to see that condition. The daily chart indicates that the beginning of that bull trend may occur in 30-45 days.
While the current daily candlestick for the altcoin market looks bearish, it does nonetheless have a substantial amount of bullish conditions. First, is the position of Future Senkou Span A. Future Senkou Span A is above Future Senkou Span B. This event is significant due to the time distance since the last Kumo Twist. The last Kumo Twist occurred on July 19th when Senkou Span A dropped below Senkou Span B. It has taken 117 days for another cross to occur. If you are a Gannyst, this should be of particular interested because 117 days falls within the 120-day Cycle of the Inner Year.
The next bullish condition is a combination of the Tenkan-Sen and Kijun-Sen. The Tenkan-Sen is above the Kijun-Sen and price remains above the Tenkan-Sen. The current daily candlestick shows price piercing below the Tenkan-Sen, but buyers stepped in to bring price above that line. The Tenkan-Sen is not the only support level that kept price from falling lower. If we look at the current Chikou Span, we can see that it is inside the Cloud and found support against the bottom of the cloud (Senkou Span A). I would anticipate prices falling to the top of the cloud – but not any further. The flat condition of Senkou Span B (the most challenging area for price to cross) is a sign of considerable strength. The power of this support zone is augmented by the presence of the Kijun-Sen just below and Senkou Span A (bottom of the Cloud) below that. There does exist the very smallest hidden bullish divergence between the RSI and Connie Brown’s Composite Index. We should also pay attention to the historical support and resistance level of the RSI – the 50 value area in the RSI has been a past support level for the current chart.
The combination of three support zones below at the 69.95 value area and the RSI support zone at 50 could provide significant support on any pullback to those zones.