Is Altseason on the Horizon? Analyst Issues Grave Warning Calling for Trend Reversal
Anjali Belgaumkar10 Jun 20242 min read
One question on everyone’s mind right now is whether altcoins will rally and hit an upward trend in the upcoming days. Analyst of Wolves of Crypto said that Bitcoin recently faced resistance, leading to a 5-6% drop. While this drop is notable, it’s not huge. However, altcoins were hit much harder. Over the past week, Bitcoin has gained 2%, but most of the top 100 altcoins have seen significant declines, many in double digits, with drops ranging from 10% to 21%.
Ethereum, which leads the altcoin market, dropped 6-7% during the same period. This is a bit more than Bitcoin’s drop and reflects the broader trend of altcoins underperforming. The overall altcoin market cap, excluding Bitcoin and Ethereum, fell by 10%, showing a more severe impact on altcoins.
The analyst pointed out that Ethereum breaking below a key support level since May 21 makes altcoins more vulnerable to further declines if Bitcoin continues to drop. To regain bullish momentum, the market needs to reverse its current trend
He explained that if the market follows typical patterns, altcoins should start rising soon. He showed that the altcoin market cap chart follows a similar five-step pattern as in the past: bottoming out, bouncing up, consolidating, and then moving to new all-time highs.
The analyst also noted that when Bitcoin dominance drops, it usually signals the start of an altcoin season. Historically, this happens after the fourth consolidation step. If this trend continues, we should expect an altcoin season and a parabolic bull market for altcoins soon. This pattern was also observed in 2017, suggesting it could happen again.
Furthermore, he discussed invalidation points for the current market trends. He noted that if Bitcoin drops below $66.8k, it would be a bad sign, but dropping below $61k would be a major indication that the trend is broken. For the altcoin market, a weekly candle close below the bull market support band on the total cryptocurrency market cap chart would be the first sign of invalidation. If these levels are breached, it would suggest that the current bullish trend is over.
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