Total2 Tests Critical Support
The market capitalization of altcoins, represented by the Total2 index (excluding Bitcoin), is currently positioned at a crucial inflection point. Technical analysis indicates a simultaneous approach to major horizontal support and a multi-month bullish trend line. These two support zones constitute the last line of defense before a potential collapse.
If supports fail, Fibonacci projections suggest a possible drop to $940 billion at the 0.618 level, or even $717 billion at the 0.786 extension, calling into question the bullish structure of the current cycle. Conversely, a bounce could propel Total2 toward $1.42 trillion, then $1.55 trillion. Stochastic RSI indicators are in oversold territory, signaling a potential bullish reversal, but price action and volume remain decisive.
USDT Dominance: The Signal That Worries Bulls for altcoins
The dominance of Tether (USDT) reflects market sentiment. A massive conversion to stablecoins indicates risk aversion and anticipation of further declines. The weekly chart shows a potential break of a descending trend line since late 2022, at the beginning of the last bull cycle.
This break could signal a major capital rotation out of risk assets. However, the weekly candle has filled the previous week’s upper wick, and Stochastic RSI in overbought territory suggests that a decrease in USDT dominance remains possible in the short term.
DXY Rejected: A Bullish Catalyst for Cryptos
The US Dollar Index (DXY) presents an inverse correlation with the crypto market. When the dollar weakens, cryptos become more attractive. The DXY has been rejected at the $100 resistance level, a major psychological threshold. Current economic policy favors a weak dollar, creating a favorable environment for altcoins.
Weekly indicators show a Stochastic RSI signaling a potential bearish reversal for the dollar, which could trigger an influx of capital into cryptos. Bitcoin recently broke its main trend to touch $95,700, a critical level to maintain to preserve the bullish structure.
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