A widely followed crypto analyst explores why some altcoins are defying the overall market downturn and breaking out against the trend.
Crypto trader Michael van de Poppe tells According to his 666,600 followers on the social media platform
“Huge breakouts on altcoins, while some are already gaining 3x!
We cannot deny that altcoins are showing some momentum. The majors are not following, Bitcoin is not following, but small caps are providing some momentum.
How can you trade that?”
To illustrate his answer, Van de Poppe uses a perpetual swap contract, or PERP, as an example. Perpetual swaps are financial instruments that allow traders to speculate on the future price of an asset without having to own it. They are similar to futures contracts, but unlike futures, they do not have an expiration date. As a result, traders can hold a perpetual swap position for as long as they want, until they decide to close the trade.
By looking at a graph of PERP, Van de Poppe can identify specific trends.
“A huge uptrend since the beginning of the month, resulting in a continuation here. A rally from $0.40 to $1.20, which may have peaked. That is something we don’t know.”
During PERP’s uptrend, Van de Poppe says he sees three clear concepts in Perp’s price action that can be applied to small-cap altcoin trading:
“1 – Breakout aggressive plays, which you can find in the chart as potential opportunities to trade and take a position. Breakouts here often lead to moves of 10-20%.
2 – S/R (Support/Resistance) Flips from that breakout, which are also marked in green as a potential box and could also result in a 10-20% bounce play.
3 – Breakdown plays, which are more difficult because the trend is still upward (in this case a short of $1.12 would have been hit, but most likely the take profit will not be hit since a callback of $1.12 is invalid).
Van de Poppe says these three concepts can be applied to altcoin charts in the coming weeks.
Don’t miss a single beat – Subscribe to receive email alerts delivered straight to your inbox
Check price action
follow us on Twitter, Facebook And Telegram
Surf to the Daily Hodl mix
Featured image: Shutterstock/Natalia Siiatovskaia/GrandeDuc
