#70%OfAltcoinsFallBelow200DMA $XRP $SOL #ShareWeekly

Seven out of ten altcoins below their 200 day average sounds like a clean bearish signal. Before I react to it, I want to understand what the number really measures, because I think it says less than it appears to.

What the indicator measures

The 200 day average is the average closing price over the last 200 days, and traders use it to separate long uptrends from downtrends. The reading counts how many altcoins on a large exchange sit below that line. It is a yes or no test. A coin that is 1% under the line counts the same as a coin that is 50% under. So 70% tells us how many coins have crossed, not how deep they have fallen.

That matters because of simple math. If a coin trades 10% under its average, a gain of about 11% puts it back above, since one divided by 0.9 is 1.11. Coins that are only a little under the line can flip back quickly, which makes this reading jumpy.

How fast it moved

In mid August, about 82% of altcoins were below the line. By early October, only about 10% were. Now it is back near 70%, and reportedly creeping toward 80%. That is a swing of roughly 60 points in a month. Over the same stretch, altcoin market cap, which excludes Bitcoin and stablecoins, rose about $320 billion between mid August and late September, then gave back about $200 billion. That is 62.5% of the gains erased, by my math, and about $120 billion of the rally still remains.

The last time it was this extreme

The 82% reading in August was followed by that $320 billion rally. The analyst noted that extreme readings have sometimes come before reversals, but was careful not to promise one. I agree with the caution. It is one example from this cycle, and in a real downtrend, breadth can stay washed out for a long time.

Who is still above the line

Not everything is falling. One report notes that a few names such as Zcash, Monero and Quant trade above their averages, while Cardano is well below its average and down more than 45% this year. That split tells me money is being selective, not simply gone.

XRP and SOL on my charts

XRP is at 1.0963, sitting right on support at 1.0930, only 0.3% below. RSI is about 26, which is oversold. Resistance is at 1.2666, which is 15.5% higher, then 1.3155 at 20.0% higher and 1.3649 at 24.5% higher.

SOL is at 89.00, with its nearest line at 86.66, which is 2.6% lower, and support at 84.39, which is 5.2% lower. RSI is about 27. Resistance is at 99.76, which is 12.1% higher, then 106.75 at 19.9% higher and 108.20 at 21.6% higher.

Both are oversold and both have a long climb to resistance. Oversold tells me selling is stretched. It does not tell me buyers are arriving.

What would make me believe a reversal

Altcoins follow Bitcoin. Bitcoin is near 74,600 against a 200 day average around 73,200, and one report puts its 50 day average near 82,000. If Bitcoin loses 73,200 on a close, I’d expect the share of altcoins below their lines to climb past 70%. A recovery of altcoins needs Bitcoin to stabilize first.

I’d look for three things. First, breadth stops getting worse. Second, ETF flows stop leaking. Third, tomorrow’s inflation report lands without pushing yields higher.

My take: this reading is more useful as a warning about market mood than as a timing tool. The extreme zone gives me a reason to watch for a bounce, not a reason to buy one. I’m waiting for Bitcoin to hold 73,200 and for XRP to hold 1.09 before treating this as a base.

Not financial advice.

Do you read 70% as capitulation or as the start of a longer bear phase? And which matters more to you for a reversal, Bitcoin holding its 200 day line or altcoin breadth improving?
@Gate_Square