A widely followed crypto analyst is diving into why some altcoins are defying the overall market downturn and breaking out against the trend.
Crypto trader Michaël van de Poppe tells his 666,600 followers on the social media platform X that some altcoins have even gone “3x” during the market tumble.
“Massive breakouts on altcoins as some are already pulling a 3x!
We can’t deny the fact that altcoins are showing some momentum. The majors aren’t following through, Bitcoin isn’t following through, but small caps are providing some momentum.
How can you trade those?”
To help illustrate his answer, Van de Poppe uses a perpetual swap contract, or PERP, as an example. Perpetual swaps are financial instruments that enable traders to speculate on the future price of an asset without having to own it. They are similar to futures contracts, but unlike futures, they do not have an expiration date. As a result, traders can hold a perpetual swap position for as long as they want, until they decide to close the trade.
Looking at a chart of PERP, Van de Poppe can identify specific trends.
“A massive uptrend since the beginning of the month resulting into continuation here. A rally from $0.40 towards $1.20, which might have peaked. That’s something we don’t know.”
During PERP’s upward run, Van de Poppe says he sees three clear concepts in Perp’s price action that can be applied to trading smaller-cap altcoins:
“1 – Breakout aggressive plays, which you can find in the chart as potential opportunities to trade and take a position from. Breakouts often lead to 10-20% movements here.
2 – S/R (support/resistance) Flips of that breakout, which are also marked with green as a potential box and can result in a 10-20% bounce play as well.
3 – Breakdown plays, which are more difficult as the trend remains to be upwards (in this case a short at $1.12 would have been hit, but most likely the take profit won’t be hit as a reclaim of $1.12 is invalidation).”
Van de Poppe says these three concepts can be applied to altcoin charts in the coming weeks.
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Featured Image: Shutterstock/Natalia Siiatovskaia/GrandeDuc
The post Crypto Analyst Breaks Down the Momentum Driving a ‘Massive Breakout’ for Altcoins appeared first on The Daily Hodl.