An analyst has pointed out two patterns forming on charts related to altcoins and Bitcoin that could suggest a bull season could be coming soon.
The Signs May Finally Be Aligning for an Altcoin Season
In two new posts on X, analyst Ali Martinez discussed some signs that could foreshadow a altcoin season. The first chart shared by the analyst is for the combined altcoin market cap, which is simply the combined market cap of cryptocurrencies excluding Bitcoin and Ethereum.
The chart shows that the total market capitalization of altcoins has been forming a pennant recently. A pennant is a technical analysis (TA) pattern with two components: a pole formed by the prevailing trend and a triangle or “pennant” that represents consolidation.
In the case of the current pennant, the strong uptrend that the altcoin’s market cap saw between Q4 2023 and Q1 2024 offsets the polar portion, while the downtrend since then matches the pennant. This type of pennant is popularly referred to as a bull pennant.
As is apparent from the chart, the altcoin’s market cap recently made another retest of the pennant’s upper channel. A significant recovery could be in store if it manages to break the resistance this time.
Pennant breakouts can be as long as the pole, so Martinez notes that the altcoin market cap could eventually surpass the $1 trillion mark. Naturally, this would only happen if a breakout were to occur. The analyst seems optimistic, saying, “it’s only a matter of time before #altcoinseason!”
The second chart that could suggest an altcoin season is approaching is Bitcoin’s market cap dominance.”Market capitalization dominance” here refers to the percentage of the total cryptocurrency market value that BTC represents.
Here is the chart of this metric shared by Martinez, which shows the pattern that has been forming in its value recently:
Bitcoin’s market cap dominance appears to have recently moved into a rising wedge pattern. The rising wedge is another TA pattern, but unlike the bullish pennant that forms in altcoin market cap, this formation is considered bearish.
In a rising wedge, the price of an asset moves up between converging trend lines, with its movement becoming narrower as it approaches the apex. As seen in the chart, Bitcoin’s market cap dominance is almost at the bottom of the rising wedge, suggesting that a break below the lower channel could be in the offing.
The metric is currently valued at 57%, but the analyst notes that this bearish formation could lead to a drop towards the 47% mark, which would set the stage for altcoin season.
BTC Price
Bitcoin’s rally has calmed down in recent days as the asset has seen a sideways movement around the $63,500 level.
