- The altcoin market capitalization has risen to $845 billion, with analysts predicting a potential upside reversal.
- ADA continues to struggle, experiencing a 13% decline last week amid declining whale transactions.
The global altcoin market has gone through a period of both optimism and caution.
At the time of writing, the global altcoin market cap stood at $845 billion, marking a significant recovery from the $729 billion recorded on August 24.
This revival in market capitalization has led to an increase in market capitalization discussions between analystswith opinions divided on the future trajectory of altcoins.
Altcoin season approaching?
One of these analysts, known as Mustache, recently shared his views on the altcoin market in a after on X (formerly Twitter).
He presented the behavior of the altcoin market over the past five years, highlighting a consistent trendline that has historically served as a support level.
According to Mustache, each time the market has reached this trendline it has produced a significant reversal to the upside.
This pattern was observed in 2019, 2020 and 2023, leading to substantial rallies, including the altcoin bull run in 2021.
Now in 2024, the altcoin market has once again reached this critical trendline, indicating that another reversal and potential rally could be on the horizon.
Source: Mustache/X
Mustache emphasized the importance of patience in today’s market, stating:
“Altcoins are on a trend line that has been of great importance for 5 years. In the past, every touch of this trend line has led to another Altcoin season. As has been said before: you need patience in this market. Those who have it will be richly rewarded.”
While this historical trendline offers hope, current market conditions for major altcoins paint a more cautious picture.
Cardano as a case study
Despite the optimistic outlook provided by the trendline analysis, individual altcoins such as Cardano remain [ADA] have faced major challenges.
ADA, one of the top altcoins by market cap, has been on a consistent downtrend in recent weeks.
In the last seven days alone, ADA has seen a 13% drop in value, with the price dropping a further 4% in the last 24 hours. At the time of writing, ADA was trading at $0.3291.
This downward trajectory is also reflected in the activity of large-scale transactions within the ADA network.
Source: IntoTheBlock
According to facts from IntoTheBlock, the number of whale transactions – which exceed $100,000 – has dropped significantly, from over 4,000 at the end of last month to less than 2,500 at the time of writing.
This reduction in whale activity indicated a cautious approach from major investors, further contributing to the bearish sentiment around ADA.
In addition to the decline in the number of whale transactions, ADA’s Open Interest, a measure of the total number of outstanding derivatives contracts, has also declined.
This past day, ADA’s Open Interest did just that decreased by 4.59%, bringing it to a press time valuation of $172.99 million.
Source: Coinglass
Read Cardanos [ADA] Price forecast 2024 – 2025
It’s worth noting that ADA’s Open Interest volume increased 107% to $273.49 million.
So while the number of contracts has decreased, the value of the remaining contracts has increased, potentially signaling greater volatility in the near future.
