Altcoins: Are These Rallies Fake-Breakouts?

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In today’s edition of the newsletter, I’ll share my thoughts on the macro bearish invalidation that many Altcoins are showing signs of but haven’t yet fully confirmed.

Because for Altcoins to invalidate a bearish bias, Altcoins need to then confirm a bullish bias.

So while Altcoins may be positioning themselves for an invalidation of a bearish bias, they are yet to confirm a bullish bias; as a result, Altcoins find themselves in a strange transitional, macro trendless vacuum.

In today’s Altcoin market update, I will cover a few Altcoins today, including:

UniSwap (UNI)

Polkadot (DOT)

Dusk Network (DUSK)

Enjin Coin (ENJ)

Elrond (EGLD)

Hedera Hashgraph (HBAR)

Crypto Com (CRO)

Let’s dive right in.

UNI/USDT - UniSwap

UNI has enjoyed a rally from the red horizontal support, a level that has enabled a strong rally in the Summer of 2022.

However, just like in the Summer of 2022, even now UNI is close to the black Macro Downtrend.

This downtrend has been a point of rejection for UNI.

Technically, breaking the Macro Downtrend would be bullish for UNI.

Losing the red level as support on the other hand would be bearish for UNI because it may be currently forming a Macro Descending Triangle with the Macro Downtrend being the sloping resistance the red level acting as a base of the predominantly bearish macro structure.

In a nutshell:
Macro consolidation in towards the apex of a potential Descending Triangle.
Break the Macro Downtrend = bullish.
Lose the red level as a support: bearish, with scope for a revisit of the orange area below.

DUSK/USDT - Dusk Network

Red area will act as resistance in the short-term.

But if this red area rejects DUSK and it manages to land on the blue support and retest it as such, then DUSK could follow the green path.

Lose blue and I won’t be interested in watching it going forward.

In a nutshell:
I’m only interested if blue holds as support.

DOT/USDT - Polkadot

DOT has rebounded from pre-2021 levels (green) as of late, returning into the orange region.

However, the top of the orange region continues to act as a resistance.

If DOT isn’t able to break beyond the top of the orange region, then it won’t be able to reclaim it as support and generate a rally to form a Higher High.

DOT continues to make Lower and Lower and Lower Highs and price needs to reverse this trend if it is to sustain a recovery.

Should DOT fail to break beyond the orange box top, then a drop into the orange box bottom could be on the cards as part of a retest.

In a nutshell:
The orange area may become a home for DOT consolidation, with the top acting as Range High resistance and the bottom acting as Range Low support.
Break of Range High = bullish trigger, loss of Range Low = bearish trigger.

EGLD/USDT - Elrond

EGLD is one of the few Altcoins that have generated a move beyond its supposed resistance.

In other words, last month EGLD lost blue as support and this month it looked like EGLD could tap this same level but as a new resistance.

This didn’t happen, in fact EGLD has broken beyond the blue level.

Now EGLD is dipping to try to reclaim the blue level as support.

Hold blue as support then the green path could be next.

However there is a danger that EGLD just upside wicked beyond blue resistance, faking out FOMO buyers.

As a result, lose blue as support and the black-arrowed volume gap would get filled more as blue will have acted as resistance instead of support.

In a nutshell:
Needs to retest blue as support for short-term bullish bias.
Lose blue as support and EGLD will revert back to a predominantly bearish bias.

ENJ/USDT - Enjin Coin

Much like EGLD, ENJ broke beyond the red level, even though it showed initial signs of turning the red level into new resistance last month.

So in that sense, ENJ may have invalidated its bearish bias by breaking back above the red level of $0.344.

However, to confirm bullish bias, ENJ needs to reclaim this same level as support.

Failure to do so and price will revert to this level becoming a resistance yet again.

If ENJ loses this level as support, then the monthly timeframe will end up as an upside wick beyond the red $0.344 level, effectively this level acting as resistance.

In a nutshell:
Invalidated bearish bias but needs to retest red as support to confirm bullish bias.
Lose red as support and EGLD will revert back to a predominantly bearish bias.

HBAR/USDT - Hedera Hashgraph

Orange horizontal will act as resistance in the short-term.

This resistance could send HBAR back into the red region, which is the support price lost last month.

Hold red as support on the dip and HBAR could be forming a Higher Low on the macro scale.

Lose red however and HBAR would develop a consolidation below this red region, which is what happened throughout 2020-2021.

In a nutshell:
As long as orange acts as resistance, HBAR could dip into red.
Red would need to hold as support to confirm the S/R flip.

CRO/USDT - Crypto Com

CRO rebounded from just under the orange level, faking a breakdown, compared to the 2021 rebound from the orange support.

If CRO is able to dip into the black level and hold there as support, then it would essentially confirm a re-entry into the black-orange macro range.

This would enable a volatile upside move for CRO but the prerequisite to that is a dip followed by a successful retest.

In a nutshell:
Dip to black followed by a retest there would be bullish for CRO for the coming weeks.
Losing the lows it pumped from however would be very bearish as CRO would drop to negative Price Discovery

Thank you for reading.