Altcoins retrace to 2017 levels: why it's a critical moment for Ethereum, XRP, et al.

Most major altcoins in the likes of Ethereum and XRP have already retraced to 2017 levels.

As Bitcoin gears towards a bearish short term trend, investors remain divided on whether altcoins will continue their recovery or begin to see weakened momentum.

"Altcoins have fully retraced back to their 2017 and/or 2016 levels. Does that mean that they can go down some more? Yes the R/R with upside potential is getting extremely better from here. Reminder; sentiment switches after price movements, not before."

Why altcoins like Ethereum and XRP are being resilient.

In the same period, the price of Ethereum and XRP dropped by around three and five percent respectively.

Altcoins have been performing better than bitcoin as of late because major alternative cryptocurrencies have already fallen by nearly 90 percent since the 2018 peak.

The next several weeks are considered to be a critical period for altcoins as it would decide whether a larger pullback to lower support levels will be tested or the current levels will be solidified as the medium to long term bottom for an extended rally.

While traders generally remain optimistic around the performance of altcoins, the amount of deposits to exchanges has declined recently, indicating a lack of appetite for cryptocurrencies at the current price range.

"Sentiment is mixed as investors wait for the next big BTC price move. This is a deciding moment as the market moves sideways. NUPL helps investors identify when to take profit & when to reenter. BTC exchange deposits and inflows have continued to decline over the last week, indicating low trading appetite from investors."

Ethereum along with other altcoins are in the "Fair-valued" range between -0.5 to 0.5, which may indicate that while altcoins are likely to see a deeper pullback as Bitcoin slips, it will see resistance as it moves below key support levels.