Ethereum's rise to a new high has pushed many cryptocurrencies outside the top to drop significantly against ETH, creating potential investment opportunities based on the historical recovery of some coins.
Comparisons against ETH show Sui, Avalanche, and Hedera are in an oversold state; on-chain data and trading volume are key indicators to assess recovery potential.
MAIN CONTENT
Ethereum's strong rise has caused many altcoins to be oversold compared to ETH, opening up investment opportunities.
Sui shows a setup similar to the July 2024 bottom before rising ~800%.
Avalanche shows signs of repeating a similar increase from the period starting in September 2023 (~600%).
How does Ethereum's strong rise affect the altcoin market?
Short answer: ETH reaching new highs has caused many coins compared to ETH to become oversold, changing the risk/reward ratio and creating opportunities for cycle-minded investors.
Analysis: As ETH rises, capital and liquidity tend to flow into ETH, driving many altcoins down significantly against ETH even though on-chain activity remains positive. In this context, comparing correlations against ETH helps identify tokens that are relatively undervalued compared to history.
Can Sui repeat its previous 800% increase?
Short answer: The Sui chart against ETH currently shows a deep oversold state, with a structure similar to the July 2024 bottom before Sui rose about 800%, so a strong recovery could still occur if supporting conditions continue.
Analysis: On-chain data shows Sui's network activity remains strong with sustained trading volume, indicating that buyers are still participating in the correction. If history repeats and capital returns, Sui could be one of the strongest recoveries in this cycle.
Is Avalanche set up like the previous 600% increase?
Short answer: The comparison against AVAX/ETH is at a similar level to September 2023, the beginning of a rally of about 600%, suggesting similar signals are emerging.
Analysis: The oversold RSI indicates momentum may be bottoming, while liquidity in Avalanche's DeFi ecosystem continues to grow steadily. If Ethereum stabilizes and capital seeks yield in DeFi, Avalanche could capitalize on this to recover strongly.
Does Hedera show signs of a sustainable reversal?
Short answer: Hedera shows a bullish divergence on the weekly chart against ETH—RSI is rising while the price is dropping—this often precedes a bullish phase, but low trading volume is a concern.
Analysis: History shows that divergence patterns have occurred before significant rallies in November 2024 when HBAR hit a bottom and then surged. However, due to weaker volume compared to Sui and Avalanche, Hedera may need an additional correction or a clear volume signal before a sustainable reversal.
Frequently asked questions
1. What causes a coin to be considered oversold compared to ETH?
Being oversold compared to ETH means the price of that coin, when valued against ETH, has dropped significantly compared to historical correlations; RSI and other on-chain indicators are often used to measure this.
2. How important are on-chain activity and trading volume?
On-chain activity and trading volume reflect liquidity and user participation levels; they help distinguish whether a correction is temporary or a sustainable decline.
3. Does the history of 800% or 600% mean it will repeat?
History suggests the possibility but does not guarantee; it is necessary to combine technical signals, on-chain data, and liquidity to assess the probability of repetition.
4. What should investors do when encountering an oversold coin compared to ETH?
Apply risk management, on-chain analysis, monitor trading volume, and wait for signs of sustainable recovery before increasing investment weight.
Source: https://tintucbitcoin.com/3-altcoin-qua-ban-dang-mua/
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