Over the past three weeks, bitcoin (BTC) has been testing its local range lows near $115,800. However, it recently broke below this support level and fell to $112,000. This decline has also affected altcoins, which had been performing well during this altseason. This raises the question of whether this is just a temporary setback or the end of the altseason altogether.
Bitcoin Falls Below Local Support
Bitcoin’s decline is a result of overall market weakness and a shift in market structure. This has led to a decrease in speculative appetite and an increase in cautious sentiment and leverage. As a result, there may be a period of consolidation and reduced volatility before any strong directional momentum can be seen. Additionally, bitcoin’s loss of range support may act as resistance in the future.
Altcoins Are Struggling Even More
While bitcoin has only fallen 8.9% from its all-time high, altcoins have performed worse. Ethereum (ETH) closed last week with a 9.7% decline, and the OTHERS index, which tracks the broader altcoin market, closed 11.5% lower. This suggests that investors are being cautious even as they rotate their capital into high-risk assets. Furthermore, the OTHERS index has lost $59 billion in value over the last 11 days, indicating a decrease in speculative appetite for altcoins.
Is Altseason Over?
The recent decline in altcoins has led to a waning of speculative appetite in the sector. This is evident in the rapid decrease in open interest in July, even as bitcoin remained in a tight trading range. Only two large-cap assets, ENA and PENGU, have seen gains in the last two weeks. However, they are also down from their all-time highs.
In conclusion, the recent decline in altcoins suggests that the altseason may be coming to an end. However, it is still too early to tell if this is just a temporary setback or a more significant shift in market sentiment. Investors should remain cautious and monitor the market closely for any potential changes.
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