- Bitcoin’s RSI indicated a potential recovery for the altcoin market, specifically RUNE, RNDR, and ADA.
- Despite the market low, technical analysis suggested that select altcoins could offer promising investment opportunities.
The cryptocurrency market, especially the altcoin sector, has seen a significant decline after reaching a peak market capitalization of $1.28 trillion in March.
Recently, the market cap fell below the $1 trillion mark, signaling a bearish phase that has made many investors cautious.
Bitcoin RSI says BTFD
However, this period of decline can also provide buying opportunities, as evidenced by key technical analyzes from leading crypto analysts.
Sheldon The Sniper, a renowned figure in the crypto analysis community, has done just that marked how Bitcoin’s Relative Strength Index (RSI) can be used to identify potential buying zones.
This includes altcoins like THORChain [RUNE]Render token [RNDR]and Cardano [ADA].
According to Sheldon, when Bitcoin’s RSI reaches a certain level, it often precedes rallies in certain altcoins.
This has been observed in companies like RUNE and ADA, which historically show strong recoveries when their RSI values fall below 40% on the weekly charts.
This suggests that despite the problems in the broader market, there is potential that astute investors can take advantage of.
At the time of writing, Bitcoin was trading at $60,746, down 1.5% in the past 24 hours, and the RSI had reached a critical zone that could indicate an impending shift in market sentiment.
Analyzing altcoins: Cardano as a case study
While Sheldon has highlighted RUNE, RNDR, and ADA as potential buys, it would only make sense to dive into any of these altcoin fundamentals to verify whether they actually offer attractive investment opportunities.
Now use Cardano as a case study. Facts van Santiment indicated that Cardano’s daily active addresses have decreased significantly, from 36,000 on June 24 to just under 8,000 recently.
This sharp decline suggested declining network activity, which could negatively impact ADA’s price.
Source: Santiment
Continue IntoTheBlock facts shows that large-scale investors, aka whales, may currently find ADA less attractive.
The number of transactions over $100,000 has fallen from 7,000 on June 24 to 4,000 at the time of writing, signaling a possible retreat in investor interest.
Source: IntoTheBlock
This trend is reflected in the asset’s Open Interest, which according to Mint glassis down 2.74% in the past day to $203 million.
Conversely, there was a significant increase in Open Interest volume, which rose by almost 50% to $307 million, indicating mixed market signals.
Source: CryptoQuant
Read Bitcoin’s [BTC] Price forecast 2024-25
These downward trends in key metrics not only suggested a price drop, but also caused approximately 74% of ADA holders to experience losses, as reported by AMBCrypto.
This situation raises a critical question: will this lead to greater selling pressure?