Bitcoin (BTC) is showing signs of consolidation within a narrowing range, accompanied by a short-term bearish bias. Such conditions have rendered both Bitcoin and the broader cryptocurrency market less appealing to long-term investors. However, amid this landscape, there arises a potential buying opportunity for alternative cryptocurrencies (altcoins) that exhibit strength.
Analyzing Bitcoin’s recent behavior, one metric of interest is Coin Days Destroyed (CDD), which measures the age of coins involved in transactions. Significant spikes in CDD indicate movement of long-dormant Bitcoin, potentially signaling profit-taking by long-term holders during rallies or after notable pullbacks. While not infallible, CDD serves as a valuable gauge of HODLer sentiment.
Moreover, Bitcoin Dominance, reflecting BTC’s market capitalization as a percentage of the total crypto market, has fallen below a former support level, currently standing at 54.68%. This decline suggests a potential shift, with altcoins possibly poised to capitalize on Bitcoin’s waning dominance, should the downtrend in BTC dominance persist.
Among the altcoins under scrutiny, Chainlink (LINK) recently garnered attention as the TD Sequential Indicator flashed a buy signal on the 12-hour chart. However, despite this bullish signal, LINK has experienced a decline of nearly 33% since late March, a period during which Bitcoin faced a comparatively lesser loss of 12.2%. Such discrepancies underscore the importance of assessing an altcoin’s resilience against Bitcoin’s movements.
Examining potential price targets for LINK, the liquidation heatmap highlights regions at $16, $18, and $19.5 as bullish targets, while support levels at $13.5 and $12.5 appear more imminent in the near term. Thus, while swing traders may find reason to go long based on BTC Dominance and TD Sequential indicators, the possibility of LINK retracing to these support levels warrants consideration before establishing trade positions.
