Bitcoin (BTC) and the wider cryptocurrency market are taking a breather after the rally on May 31. Meanwhile, most altcoins remain severely oversold, with most between 70% and 90% below their all-time highs.
Total altcoin index capitalization
What is clear is that fear is everywhere and blood is in the water. Risk-on markets are suffering worldwide, but it is exactly these kinds of conditions that create opportunities where professional money accumulates and adds to positions.
Let’s take a look at three altcoins that could be positioned for a rebound if the broader market enters a new uptrend.
ADA could be setting up for an 80% surge
Cardano (ADA) has a significantly bullish update coming very soon. The much anticipated Vasil hard fork, which increases performance and adds more Plutus enhancements, is planned for June.
From a price action perspective, ADA is positioned in a strong price range that will likely support any further upside that the broader market experienced. Within the Ichimoku Kinko Hyo system, ADA has maintained a significant gap between the bodies of the past three weekly candlesticks and the Tenkan-Sen.
When the bodies of the candlesticks and the Tenkan-Sen have noticeable gaps, a correction often occurs within three to four days. This is because the equilibrium is out of sync, the Tenkan-Sen and price action like to stick together as much as possible. A mean reversion back to the Tenkan-sen is extremely likely when one strays too far from the other.
ADA/USD weekly Ichimoku Kinko Hyo chart Source: TradingView
However, if the broader cryptocurrency market experiences a big bounce, ADA price may shoot past the Tenkan-Sen to test the Kijun-Sen. ADA has not tested the weekly Kijun-Sen since the week of November 8, 2021.
The weekly Kijun-Sen is at $1.02 and contains the 2021 volume point of control and the 50% Fibonacci retracement of the all-time high to the low of January 25, 2021.
ADA/USD weekly chart (Binance) Source: TradingView
Related: Bitcoin may hit $14K in 2022, but buying BTC now ‘as good as it gets:’ Analyst
MATIC aims for $1
Looking at the weekly chart of Polygon (MATIC), one…
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