- Before you go out and buy some alternative coins, you should study the important support levels.
- While the price of some alternative coins may appear to have stabilized, pitfalls remain.
- How can you know if a cryptocurrency has fully reset?
Looking for alternative coins near the end of a market cycle? Make sure they’ve hit rock bottom before investing. You don’t want any unpleasant surprises, so it’s like the hero checking to ensure the poison gas is gone before removing his mask. How do you know if the downtrend for your preferred alternative coin has ended or if there’s more red to come? Let us demonstrate.
Alt Coin Resets Hold the Key
During a market cycle, alternative cryptocurrencies typically follow a predictable pattern of a slow, steady ascent followed by a rapid, exponential decline. It’s vital to know when it’s safe to invest again because these cycles tend to repeat, at least with altcoins that can survive for a while.
One important way to measure is to compare the price to where it was before the rapid rise. After a long time of being spread around, an alternative coin doesn’t have to make a full correction of a move before we can be sure it’s ready to buy.
It’s clear that after a meteoric rise in early 2021, FRONT began a steady slide during the subsequent 12 months. The resistance area from late 2020 now serves as support, setting the stage for the subsequent parabolic run and subsequent bounce in July 2021. After that brief upswing fizzled out, the price dropped down to the same support level it has been clinging to for the past two months.
If you believe there will be a pump in 2022, you should fill up here at this support area, as the price activity signals a full reset after the parabolic.
There is a dramatic discrepancy between the DOGE and FRONT graphs. Price action for DOGE has been strictly negative from the blowoff high in early 2021 when it encountered resistance around the $0.08 region.
The key difference is that all support zones have been breached by DOGE on the way down, with only the last one at $0.08 remaining. Even if the price action looks like it’s turning the corner right now, there hasn’t been a true price reset yet, and the $0.08 level is begging to be tagged. Not only is it not attractive at its current price, but that price has no support in the past.
While this isn’t a foolproof method for determining whether or not an alternative coin has finished its cycle, it is a good sign.