Altcoins Can Drop Another 75% - Worst Case Scenario!
In this analysis I want to talk about a long-term parallel channel on TOTAL3, which is the total marketcap of all altcoins.
Preface: before everyone gets offended etc, this is not my most likely scenario. Big chance that this pattern won't play out. Nevertheless, it's important to consider different market outcomes. Trading consists of IF>THEN decisions. Ask yourself, if the market drops another 75% from here, what will you do?
Now into the analysis.
The parallel channel is constructed from the top resistance and anchoring that resistance to the 2020 covid dump.
As seen on the chart, alts lost over 92% of their value in the 2018 cycle. Currently, alts have lost 75% of their worth during the last cycle. If alts were to go down towards the bottom yellow support, they could lose around 85%-88% (depends on time) value.
In other words, if this worst case scenario were to play out, alts could lose 70%-7% of their CURRENT value.
Is this pattern likely? No. Should you prepare for it? Yes. Keep it simple, assume that the bottom support area is a great long-term entry point and can function as a bear-market bottom in case we go down further.
There is definitely some risk of a recession as per my last yield-curve analysis. Furthermore, the SAHM Rule Recession indicator (google it) signals that a recession is coming. If the stock markets would go down like in 2001 and 2007, we're in for a wild ride in crypto.
Happy to hear your thoughts.
Preface: before everyone gets offended etc, this is not my most likely scenario. Big chance that this pattern won't play out. Nevertheless, it's important to consider different market outcomes. Trading consists of IF>THEN decisions. Ask yourself, if the market drops another 75% from here, what will you do?
Now into the analysis.
The parallel channel is constructed from the top resistance and anchoring that resistance to the 2020 covid dump.
As seen on the chart, alts lost over 92% of their value in the 2018 cycle. Currently, alts have lost 75% of their worth during the last cycle. If alts were to go down towards the bottom yellow support, they could lose around 85%-88% (depends on time) value.
In other words, if this worst case scenario were to play out, alts could lose 70%-7% of their CURRENT value.
Is this pattern likely? No. Should you prepare for it? Yes. Keep it simple, assume that the bottom support area is a great long-term entry point and can function as a bear-market bottom in case we go down further.
There is definitely some risk of a recession as per my last yield-curve analysis. Furthermore, the SAHM Rule Recession indicator (google it) signals that a recession is coming. If the stock markets would go down like in 2001 and 2007, we're in for a wild ride in crypto.
Happy to hear your thoughts.
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