With the frequent changes in the price of various cryptocurrencies, investors must understand that altcoins often undergo multiple days or weeks of correction while maintaining an overall uptrend. This may seem illogical, but it is a critical market cycle phase characterized by extended and steeper upward movements.
For observant traders, a consolidation during this phase is a strategic point for re-entry before the upward surge resumes.
The rationale behind this approach becomes more apparent when we draw parallels to historical patterns, particularly those observed at the close of 2015 and the conclusion of 2019, as crypto specialist Michaël van de Poppe highlighted in his post on X on November 19.
Ethereum’s price surge trajectory throughout time. Source: Michaël van de Poppe
In the early stages of these upward movements, corrections of multiple days often bring prices back to higher timeframe support zones. Rather than being causes for concern, these corrections represent suitable entry points.
Reflecting on the 2020 DeFi summer, which could resurface in 2024, we witnessed similar correction phases during the bullish run.
Zooming in on the specific price actions, ETH experienced corrections ranging from 30-50% before reaching its peak. Such fluctuations are not strange but natural to market dynamics when viewed on shorter timeframes like 1-hour, 4-hour, or 15-minute charts.
ChainLink’s current correction phase
Effectively navigating through these fluctuations involves identifying and leveraging higher timeframe support entries. Comparing the price action of Ethereum with that of current projects like ChainLink (LINK) reveals that the latter may only exhibit a modest 20% correction or even less.
In such cases, a correction of 30% could further clarify the trend, presenting a compelling entry opportunity.
ChainLink’s current price correction. Source: Michaël van de Poppe
This development is also highlighted by cryptocurrency analyst Ali Martinez, who claims that LINK may see a reset to a price of $14 before continuing its price rise to $20, as highlighted in his post on November 20.
#Chainlink could be breaking out from a bull flag! We could see a retest of the breakout zone around $14 before $LINK marches toward $20!Looking to trade this #LINK setup? Head over to @bytradeio and sign up using the promo code 65947196 here: https://t.co/YHJXZCMpLS pic.twitter.com/LQm9xP5MyP
— Ali (@ali_charts) November 19, 2023Current example in Arbitrum
As per Coin98 Analytics, ARB is currently experiencing one of the highest daily counts on Layer2 when it comes to adding the new non-fungible tokens (NFT), which could aid it in breaking from its current price.
Arbitrum’s current correction phase. Source: Michaël van de Poppe
As seen from the previous examples, investors should not be deterred by altcoins undergoing corrections in the 30-50% range; as per Poppe, now may be the time to seek entry points and look to capitalize on the unfolding opportunities.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
