Popular Altcoins Face Reversal Amid Bitcoin Surge

On Sunday, September 29, several popular altcoins experienced a significant reversal as Bitcoin’s recent surge stalled just below $66,000.

Jasmy, Daddy Tate, and Reef Reverse

JasmyCoin, a well-known Japanese cryptocurrency, retreated to $0.02326, marking an 8% decline from its highest level on Saturday. Daddy Tate, a meme coin associated with controversial social media personality Andrew Tate, fell to an intraday low of $0.1147. Reef also dropped to $0.0052.

Several top gainers for the month saw sharp declines, signaling that traders might be taking profits. Moo Deng (MOODENG), a viral hippo-themed meme coin, declined by 17%, while LandWolf (WOLF) fell by over 10%.

Market Cap Decline

As a result, the total market cap of all cryptocurrencies tracked retreated by almost 2% to $2.4 trillion. Despite this, cryptocurrencies have remained some of the best-performing assets this month. Bitcoin rose by over 20% from its lowest point during the month and remains about 10% below its all-time high. This rally explains why most altcoins have bounced back, as they often perform better during bullish cycles.

Santiment Warning

There are two possible reasons for the retreat in altcoins like Jasmy, Reef, and Daddy Tate. Firstly, Santiment warned that Bitcoin might struggle to hit its all-time high due to the rising bullish posts about Bitcoin on social media. While positive sentiment is usually seen as favorable, Santiment noted that markets historically move in the opposite direction of crowd expectations.

If you’re awaiting Bitcoin’s new all-time high, it may need to wait until the crowd slows down their own expectations. There are currently 1.8 bullish posts toward BTC for every 1 bearish post. Markets historically always move in the opposite direction of the crowd’s expectations.

Technically, there are concerns that Bitcoin may encounter resistance at the descending trendline connecting the highest swings since March. Failure to break this level could push Bitcoin lower, dragging other altcoins with it. On the positive side, a break above this level, as some analysts predict, could push Bitcoin to the next resistance point at $70,000 followed by its all-time high.

Profit-Taking Among Investors

Secondly, these tokens retreated due to profit-taking among investors following the recent surge. At its highest point this month, Reef was up by over 1,018% from its lowest point. Similarly, Jasmy saw a 48% increase, and Daddy Tate was up by 144%. Historically, altcoins tend to retreat after a strong rally. For instance, on-chain data shows that a Jasmy whale moved tokens worth $1.5 million to Coinbase. Three other wallets moved tokens with a combined value of $4.5 million to Coinbase in the last 24 hours.

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