As a seasoned researcher with over two decades of experience in the financial markets and a keen interest in cryptocurrencies, I find myself intrigued by the recent observations made by analyst Ali Martinez regarding the potential signs pointing towards an altcoin season.
A researcher has identified potential trends emerging in the graphs related to altcoins and Bitcoin, which might indicate a shift towards a period of increased activity for altcoins (altseason) could be approaching.
Signs May Finally Be Aligning For An Altcoin Season
In two new posts on X, analyst Ali Martinez has discussed some signals that could foreshadow an altcoin season. The first chart shared by the analyst is for the combined altcoin market cap, which is simply the combined cryptocurrency market cap excluding Bitcoin and Ethereum.
The graph indicates that the overall value of altcoins, as represented by their market cap, has been taking on a ‘pennant’ shape lately. This ‘pennant’ is a technical analysis pattern, characterized by two elements: a ‘pole’ which signifies the dominant trend, and a ‘flag’ or ‘pennant’, symbolizing a period of consolidation.
As an analyst, I’ve observed an interesting pattern in the altcoin market cap trends between Q4 2023 and Q1 2024. The significant upward surge resembles the pole of what we call a ‘bull pennant’. Since then, the market has seen a downtrend, which aligns with the shape of the pennant itself. This pattern is often referred to as a bull pennant due to its bullish implications in the financial markets.
It’s clear from the graph that the value of altcoins has been testing the upper boundary of a pennant pattern again. If it successfully breaks through this resistance, there could be a substantial increase in its value.
Breakouts in Pennants may match the length of the pole, hinting that the cumulative value of altcoins could potentially surpass $1 trillion. However, this would only occur if a breakout takes place. The analyst appears hopeful, stating, “It’s just a matter of time until we see #altcoinseason!
The second chart that could hint towards the oncoming of an altcoin season is the market cap dominance of Bitcoin. “Market cap dominance” here refers to the percentage of the total cryptocurrency market cap that BTC accounts for.
Below is a graph presented by Martinez, illustrating the emerging trend in the metric’s value over time.
Recently, it seems that the Bitcoin market’s share of total capitalization has been trending upward in a pattern resembling a rising wedge. Unlike the bullish pennant formation observed in the altcoin market caps, this wedge shape typically indicates a bearish trend for Bitcoin.
In a rising wedge pattern, an asset’s price advances while being bounded by trendlines that gradually converge towards each other. The movement becomes increasingly constricted as the asset approaches the top of this wedge-like structure. As can be seen in the chart, Bitcoin’s market cap dominance is nearing the end of a rising wedge, which implies that a potential break below the lower trendline could occur imminently.
The measurement stands at 57%, yet the analyst points out that this potentially bearish pattern might cause a drop down to around 47%, paving the way for the altcoin rally period.
BTC Price
Over the past few days, Bitcoin’s escalation has slowed, with the cryptocurrency moving laterally near the $63,500 mark.
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2024-09-24 05:10