An analyst has pointed out two patterns forming in altcoin and Bitcoin-related charts that could suggest an altseason may be coming soon.
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 shows that the total altcoin market cap has been forming a pennant recently. The pennant is a pattern in technical analysis (TA) with two components: a pole made up of the prevailing trend and a triangle or “pennant” representing consolidation.
In the case of the current pennant, the sharp uptrend that the altcoin market cap saw between Q4 2023 and Q1 2024 makes up for the pole portion, while the downtrend since then corresponds to the pennant. This type of pennant is popularly called a bull pennant.
As is apparent in the chart, the altcoin market cap has recently been making another retest of the upper channel of the pennant. It might see a significant rally if it manages to break the resistance this time.
Pennant breakouts can be the same length as the pole, so Martinez notes that the altcoin market cap could end up crossing the $1 trillion mark. Naturally, this would only be if a break does happen. The analyst sounds optimistic, though, saying, “it is just a matter of time before #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.
Here is the graph for this metric shared by Martinez, which shows the pattern that has been forming in its value recently:
The Bitcoin market cap dominance appears to have been moving in a rising wedge pattern recently. Therising wedge is another TA pattern, but unlike the bull pennant forming in the altcoin market cap, this formation is considered bearish.
In a rising wedge, the asset’s price moves up between converging trendlines, with its movement getting narrower as it approaches the apex. As is visible in the chart, the Bitcoin market cap dominance is nearly at the end of the rising wedge, which suggests a break under the lower channel may happen soon.
The metric has a value of 57%, but the analyst notes that this bearish formation could lead to a dip toward the 47% mark, which would set the stage for the altcoin season.
BTC Price
Bitcoin’s surge has calmed down over the last few days as the asset has taken sideways movement around the $63,500 level.
Featured image from Dall-E, charts from TradingView.com