Ethereum, Solana show ‘W-bottom’ patterns – Has deleveraging done its job?

Key Takeaways

What’s next for altcoins like SOL, ETH?

They have bottomed out, but uncertainty on BTC direction could derail recovery. 

Why are analysts divided on BTC’s short-term outlook?

It has broken key supports, and $100K could be the next battle for bulls. 

Despite the market’s cautious tone, leading altcoins like Ethereum [ETH] and Solana [SOL] may have printed a local bottom. 

According to John Bollinger, a renowned Financial Analyst and Developer of the Bollinger Bands technical indicator, SOL and ETH may be ready to recover. However, BTC’s rebound remains uncertain. 

“Potential ‘W’ bottoms in Bollinger Band terms in $ETHUSD and $SOLUSD, but not in $BTCUSD. Gonna be time to pay attention soon, I think.”

For perspective, the “W” shape patterns are common triggers for a recovery. For SOL, the $180 was defended as support while ETH secured $3600.  

Will the recent leverage flush improve recovery?

Besides, the recent $19 billion de-leveraging cleared much market froth that could allow a much more sustainable recovery. 

In fact, the CoinGlass Derivatives Risk Index (CDRI) flashed an “overheated” and “high risk” level for liquidations in early October.

This coincided with Bitcoin [BTC] surging to a record high above $126K and traders chased the rally with leverage. 

At press time, the CDRI reverted to “neutral” reading. This meant a balanced, reduced leverage but unclear direction that calls for flexibility to capitalize on whatever direction the market takes. 

In other words, the condition was good for an altcoin rebound, but uncertainty still lurks. In fact, the overall market sentiment was at “fear” levels last seen during the Trump tariffs in early 2025. 

Altcoin panic as analysts split on Bitcoin’s next move

Unsurprisingly, altcoins have embodied the fear more than BTC. This week alone, Altcoin Exchange Inflow spiked to a year high, underscoring panic sell-off before and after the 10th of October de-leveraging event. 

The spikes also tend to coincide with BTC local tops. So if BTC forms a bottom and recovers, altcoins, like SOL and ETH, may follow suit. 

Unfortunately, analysts have elicited mixed views for BTC’s outlook in the short term. Ansem, for example, said that he is not bullish unless BTC reclaims $112K. 

“I see an end of momentum and price dropping over. ETHBTC has already pumped as it does at the end of every cycle. The only way for me to change my mind is if we get back above $112k.”

The bearish sentiment was shared by Chris Burniske, former Ark Invest Crypto Lead and Partner at VC Placeholder.

Burniske noted that he would be interested in BTC if it fell to $75K, adding $100K as a key support in the short-term.