Bitcoin and the entire digital currency industry are resting after the May 31 rally. Meanwhile, many altcoins remain heavily oversold, with most selling at 70-90% of their historical peak levels.
Let’s take a look at three altcoins that could be on the verge of a comeback if the overall market resumes its upward trend.
Cardano (ADA) is likely to receive a bullish update in the near future. In June, the long-awaited hard fork Vasil will be released, which will improve performance and provide more Plutus features.
Cardano is trading at a technically high price level, which will likely support more upside in the broader market. ADA maintained a considerable gap between the bodies of the previous three weekly candlesticks and the Tenkan-Sen within the Ichimoku Kinko Hyo system.
When there are noticeable deviations between the candlestick bodies and the Tenkan-Sen, a correction usually occurs within three to four days. The Tenkan-Sen and the price movement strive to stay as close as possible since the equilibrium is out of whack. When one strays too far from the other, a medium return to the Tenkan-sen is very likely.
If the cryptocurrency market as a whole experiences a significant rally, ADA price could break through the Tenkan-Sen and challenge the Kijun-Sen. Since the week of November 8, 2021, ADA has not tested the weekly Kijun-Sen.
The weekly Kijun-Sen is currently trading at $1.02, with the volume control point for 2021 and the 50% Fibonacci retracement from the all-time high to the January 25, 2021 low.
Looking at Polygon’s weekly chart ( MATIC ), it’s impossible not to notice how much it looks like ADA. Polygon and Cardano both lost $3 and are currently trading between $0.50 and $0.60, but the similarities end there.
MATIC, like ADA, has huge gaps between the weekly candlestick bodies and the Tenkan-Sen. The weaknesses of the polygon, on the other hand, are more serious. Likewise, the difference between the price and the Kijun-Sen is significantly greater.
There is a maximum distance that price can move away from the Kijun-Sen before encountering a violent middle reversal in the Ichimoku Kinko Hyo system. This is a 63% restriction for Polygon.
Read Also: What is Polygon?- The Ultimate MATIC guide
If Bitcoin’s bullish momentum returns, MATIC will most likely lead the altcoins higher until they reach the $1.00-$1.15 value level near the weekly Tenkan-Sen.
It should be recalled that a few major digital currencies did not reach new all-time highs throughout the last notable bull run, which spanned from the COVID blackout to November 2021. One of them is Stellar ( XLM ). In fact, the last time XLM hit a new all-time high was almost four and a half years ago on January 8, 2018.
A very apparent descending wedge pattern is something XLM has going for it that few other weekly charts have. Wedge patterns are the most powerful of the classic rectangle and triangle patterns in technical analysis. The potential downside of the false breakout is what makes his corner so powerful.
The most likely trend of a falling wedge is higher, but breakouts below can create huge selling opportunities. Analysts and traders expect a failing falling wedge to lead to an early and quick sell off, but the bears have been unable or unable to do so so far.
Instead, XLM’s weekly chart indicates a high probability of a fakeout. XLM is likely to hit the second high of the falling wedge near the $0.38 value range if the bullish momentum returns to the cryptocurrency market.
Technical analysts believe that fundamentals follow techniques. If so, altcoins including ADA, MATIC, and XLM could greatly benefit from another bullish wave.