Bitcoin has returned to the $7,000 range after 110 days, while Ethereum is precariously hovering around the $2,000 support level. Altcoins have collectively "plunged," suggesting we may be in the most dangerous phase of the bull market cycle.

BTC: May Lose the Bull-Bear Line

• 8-hour level: Has broken below the Vegas channel long tunnel area, with strong bearish signals from MACD. Market selling pressure is evident, and prices may continue to decline in the short term.
• Daily level: Currently crossing below the bull-bear line MA200. Although the RSI(6) has entered the oversold zone, downward pressure has not been fully released, and the market has not yet bottomed out.
• 3-day level: EMA52 is under strong pressure, and the MACD fast and slow lines are approaching the zero axis. In the short term, it may continue to face pressure until new support is found.
• Key support and resistance: The key support level below is $76,490. If it breaks below this, there may be greater downward space. The resistance level above is $88,470. If the rebound cannot break through this range, the likelihood of BTC recovering in the short term is low.

ETH: Technical Deterioration

• Technical aspect: The 8-hour cycle shows a significant drop; the 3-day EMA12 has crossed below the Vegas channel; the 5-day MACD DIF line is crossing below the zero axis, indicating technical deterioration.
• Short-term trend: The current price is close to the lowest point on February 3 ($2,080). If it breaks below the key support level of $2,000, it may accelerate down to $1,800, with a relatively large decline.
• Resistance above: The strong resistance level at $2,625 may become a bottleneck for upward movement. If this price level cannot be broken, subsequent upward momentum will be greatly restricted.

Altcoins: Rebound is Just Short-term Capital Rotation

Yesterday, I mentioned in a live broadcast that the recent rebound in altcoins is actually a rotation of capital between different cryptocurrencies, rather than a true "altcoin season." The rise of altcoins has not received sustained support from capital and is likely to retrace with further declines in BTC.

In the past 24 hours, many altcoins have seen significant pullbacks: KAITO plummeted over 31%, PI fell 20%, RUNE retraced 28%, and TAO dropped nearly 20%…

These pullbacks indicate that altcoins have not emerged from an independent upward trend and continue to weaken as BTC declines, with the total market capitalization also decreasing and sentiment worsening.

How to Determine if Altcoin Season is Healthy?

To assess whether the current altcoin season is healthy, we can analyze several key indicators:

1. Is the total market capitalization continuously rising?

• Rising: If the total market capitalization is continuously rising and capital is flowing into the altcoin market, then it may indicate a true altcoin season, with the market in a healthy bull state.
• Declining or sideways: If the total market capitalization stagnates or even declines, it indicates that capital is merely rotating between cryptocurrencies, possibly just a pseudo-altcoin season.

2. Is BTC's market cap share declining?

• BTC share declines, total market cap rises: This is a sign of a healthy altcoin season, meaning capital is starting to flow into altcoins, strengthening them.
• BTC share declines, total market cap remains unchanged or declines: If the total market cap does not effectively rise, then this is a pseudo-altcoin season, where the rise of altcoins is usually fleeting and may ultimately follow BTC's decline.

3. What is the market sentiment?

• Greed is high, influencers frequently promote, Meme coins surge: This situation often signals a market top, with investor enthusiasm too high, potentially leading to a market crash.
• Mainstream altcoins steadily rise, clear narratives: This is the true healthy altcoin season, where market rises have clear direction and fundamental support, making rebounds more likely to persist.

Summary: Healthy Altcoin Season vs. Pseudo Altcoin Season

• Healthy altcoin season: Capital inflow, total market cap rises, BTC share declines, altcoins rise independently and gradually strengthen.

• Pseudo altcoin season: Capital only rotates between cryptocurrencies, total market cap declines, BTC's dominance remains unchanged, and the rise of altcoins is often temporary, ultimately following BTC's decline.

Currently, market sentiment remains unstable, with BTC showing no clear signs of stopping its decline. The pullback in altcoins also proves that we are in a pseudo-altcoin season. It is advisable to trade cautiously in the near term, manage risks well, and avoid blindly chasing after altcoins.

The above content is for sharing only and for reference, not constituting any investment advice. If you have any questions, feel free to join the 【PRO CLUB】 group to discuss with me~

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