Altcoin's 5-Year Sideways Trend Cracks...Ethereum (ETH) Enters Major Reversal Test

▲ Ethereum (ETH)

An analysis suggests that the five-year altcoin sideways trend has entered a critical turning point where macroeconomic and technical reversal signals are converging.

Dan Gambardello, host of the cryptocurrency YouTube channel Crypto Capital Venture, claimed in a video uploaded on August 3 (local time) that the altcoin market capitalization, excluding Bitcoin and stablecoins, is preparing for its third upward cycle. The altcoin market has experienced its longest sideways trend in history, lasting approximately five years. Gambardello described the current moment, where the end of quantitative tightening (QT) and the possibility of economic expansion coincide, as “the last chance left for altcoins.”

Gambardello drew attention to the ETH/BTC monthly chart, which represents the relative price of Ethereum (ETH) and Bitcoin (BTC). ETH/BTC has remained below its 20-month moving average since January 2023 but recently broke through its long-term downtrend line. He analyzed that the pattern is similar to late 2019 and early 2020, when ETH/BTC bottomed after the end of quantitative tightening. However, the breakthrough of the 20-month moving average has not been confirmed. He warned that if the dollar-denominated Ethereum price loses its support level, it could fall to $1,500.

For Sui (SUI), breaking the 20-week moving average was presented as the criterion for an upward reversal. Futures market data cited in the video showed that 73% of top traders chose a buy position for Sui, a higher bullish sentiment than XRP, Solana, Tron, and Bitcoin. While the monthly Relative Strength Index (RSI) has decreased after a long-term decline, the Moving Average Convergence Divergence (MACD) has not yet turned into an upward signal. Gambardello analyzed that a reversal trend can only be confirmed after breaking through the $0.8 to $0.85 range and securing it as a support level.

For Cardano (ADA), $0.21 and $0.24 were identified as key resistance levels. The $0.21 level contains a downtrend line and the 20-week moving average. The 200-day moving average is located near $0.24. For Cardano to rise from its then-price of $0.18 to the 200-day moving average, it would need to increase by about 25%. Gambardello explained that breaking through $0.24 could strengthen the long-term trend reversal signal. After that, the $0.38 to $0.4 range, where the 50-week moving average is located, would be the next test.

Gambardello argued that the cryptocurrency market reacts more significantly to economic trends and liquidity than to fixed four-year cycles. In the past, altcoin upward cycles began in earnest when the Purchasing Managers' Index (PMI) strongly exceeded 55, but the recent index has been sideways. The MACD of the altcoin market capitalization chart is also attempting to break through the signal line, a pattern seen at major bottoms in 2019 and 2023. He emphasized that while the end of quantitative tightening, economic expansion, and technical reversal signals are converging, an upward cycle cannot be confirmed until key moving averages are broken.

[Article Key Summary]

-Gambardello argued that the altcoin market, which has been sideways for five years, is preparing for its third upward cycle based on the end of quantitative tightening and the potential for economic expansion.

-For Ethereum, the breakthrough of the ETH/BTC 20-month moving average; for Sui, $0.85; and for Cardano, $0.21 and $0.24 were presented as key conditions.

-The rebound in the Purchasing Managers' Index and technical signals from altcoin market capitalization support a bullish outlook, but the upward reversal is not yet confirmed.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*