Technology stocks led gains across Asia after US chipmakers rallied on Friday, while oil prices rose as the US and Iran exchanged attacks involving tankers in the Strait of Hormuz. The crypto market remains nicely supported by the bullish momentum in stocks, and we can now also see further upside in some altcoins as altcoin dominance is starting to pick up. There is room for more gains, but watch for pullbacks due to ongoing Middle East tensions and higher oil prices, which could keep the USD in consolidation. As long as we remain in a risk-on environment and stocks have not yet fully completed their bullish cycle, the crypto market could stay in rally mode.
The Crypto TOTAL market cap chart remains under intraday bullish pressure and still has room to push toward the $2.8T area within wave (5) of 3. This could trigger further rallies in other altcoins before we see a new, higher-degree wave 4 correction.
Despite Bitcoin's strong recovery, the BTCUSD Longs/Shorts ratio is once again quickly approaching the lower end of its range, showing that traders remain relatively cautious while short positioning is increasing. This could actually work in Bitcoin's favor, as a buildup of short positions creates the potential for a short squeeze and additional upside if BTC continues to move higher.
TOTAL3ESBTC represents the ratio of the total crypto market cap excluding BTC, ETH, and stablecoins relative to Bitcoin. Looking at the daily chart, the structure has remained sideways, which we now interpret as a bullish ABCDE triangle pattern within wave B before further recovery in wave C. This would open the door for altcoins to begin significantly outperforming Bitcoin, and we may even see a short-term altseason now that the broader crypto market has entered recovery mode.
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