- Crypto market cap slips to $2.63T after breaking a rising channel, now testing crucial $2.86T support for potential rebound.
- A rejection at $2.9T signals resistance strength, while bearish pressure builds as altcoins risk further losses if trendline breaks.
- Bulls must defend current support or face a broader correction, with altcoins likely to underperform amid heightened market volatility.
The crypto market cap fell slightly to $2.63 trillion on May 4, marking a 0.07% drop or $2.048 billion loss. This minor dip comes after the market broke below a rising channel that had formed between April 19 and May 1. The trend now approaches a critical support level near $2.86 trillion. Consequently, traders are closely watching for a potential bounce or deeper correction. A failure to hold above this trendline could trigger more short-term downside pressure across altcoins.
Besides, the four-hour TradingView data shows the market recently rejected the $2.9 trillion resistance zone. A bearish engulfing candle confirmed this rejection. The move followed a powerful rally from April 21, when total market cap surged from $2.67 trillion to nearly $3 trillion. That rally marked a sharp 12% gain in less than two weeks, reflecting strong bullish momentum.
Price Tests Former Resistance as New Support
Moreover, the market now hovers below the $2.86 trillion zone, a previous resistance that turned into support. Holding this level remains crucial for bulls. If this support breaks, the market may revisit the earlier consolidation range near $2.65 trillion. This zone had served as a strong base during April’s accumulation phase.
Source: World Of Charts
Additionally, multiple red and green candles seen throughout April reflect increased volatility and market indecision. Short-term traders capitalized on frequent price swings, but long-term holders faced mixed signals. The current positioning near the support line leaves both paths open. Black arrows on the chart suggest potential upside recovery or continued downside pressure.
Altcoins Vulnerable if Breakdown Persists
Altcoins could suffer further if the total market cap dips below current levels. Many alternative assets rely on broader market strength to maintain momentum. Hence, a continued drop may result in accelerated losses across alt sectors.
However, should bulls defend this support and reclaim higher ground, a move back toward $2.9 trillion becomes likely. That would reignite bullish sentiment and possibly test the $3 trillion mark again. Volume indicators remain unclear, but overall sentiment leans neutral to bearish at this stage.
