- Ethereum Name Service (ENS) and various altcoins, including LayerZero, Mog Coin, and Bonk, experienced significant price increases amid high trading volumes.
- However, the rally may be short-lived due to potential bearish patterns in Bitcoin, which could lead to a continued downtrend for these altcoins.
A Sudden Uptick Amidst Caution
Ethereum Name Service (ENS) stood out as one of the best-performing altcoins on Monday, attracting attention ahead of its ENSv2 upgrade. Meanwhile, LayerZero, which recently launched its airdrop, saw its price surge to $3.6, marking a 40% increase from its lowest level last week.
In the meme coin space, Mog Coin achieved an all-time high of $0.0000021, representing a remarkable rise of over 200% from its June low. Bonk, another meme coin, climbed more than 32% from its lowest point last month, earning it a spot as our chart of the week. Other notable gainers included altcoins like Dogwifhat (WIF), Immutable X (IMX), Fantom (FTM), and Bittensor (TAO).
Market Dynamics and Potential Risks
The recovery in Bitcoin and altcoins occurred amidst a high-volume trading environment. According to CoinMarketCap, daily trading volume jumped over 45% to $53 billion, the highest level since June 28th. This uptick lacked a clear catalyst, suggesting that investors might have embraced a risk-on sentiment following the French election on Sunday. Although Marine Le Pen’s party emerged victorious, the result fell short of poll predictions.
In response, the US dollar index (DXY) dropped by 15 basis points, while global stocks saw a significant rise. The French CAC 40 index increased by over 2%, and the German DAX index gained 0.70%. In the US, futures linked to the Dow Jones and Nasdaq 100 indexes also showed positive movement.
Despite these gains, there is a looming risk that the recent rallies in LayerZero, Mog Coin, and Bonk could be short-lived. This scenario, known as a “dead cat bounce,” describes a temporary recovery in asset prices followed by a continued downtrend.
Bitcoin has exhibited several concerning patterns in recent months, including a double-top formation at $72,000 last month. The cryptocurrency has struggled to surpass this level since March 27th and remains below its 50-day and 100-day Exponential Moving Averages (EMA), indicating bearish control. Additionally, Bitcoin has recently formed a bearish pennant chart pattern.
Consequently, there is a risk that Bitcoin could drop below $60,000 this week. Should this occur, altcoins like Mog Coin, Bonk, and LayerZero may follow suit, resuming their bearish trends. Investors are advised to exercise caution and stay vigilant in this volatile market environment.
