A renowned crypto analyst on X has recently sparked discussions within the altcoin community by predicting an imminent “altcoins bull market.” This anticipation is rooted in observing a notable pattern in the altcoin market cap chart.
Accumulation Pattern Suggests Bull Market Incoming
According to the crypto analyst Mags on X, the market capitalization of cryptocurrencies, excluding Bitcoin, has reached a crucial stage in the Wyckoff Accumulation Pattern, hinting at potential upward momentum shortly.
For context, the Wyckoff Accumulation Pattern, named after Richard D. Wyckoff, a pioneering early 20th-century trader, is used to identify the stages of a market bottom when institutional investors accumulate an asset before the start of a new uptrend.
The Wyckoff Accumulation pattern typically unfolds in five phases (A), designed to highlight how large professional interests prepare an asset to be moved into a substantial markup phase.
Phase A signals the halt of the previous downtrend, marked by initial demand indicating that the market is ceasing to make lower lows. Phase B is characterized by testing, as institutions absorb supply amid volatile price action, including potential false breakouts.
Phase C features a key test of the lows through a “Spring” or “Shakeout,” allowing smart money to acquire an asset from retail holders at lower prices. This phase confirms the market’s readiness to advance. Phase D sees the start of the uptrend as demand takes control, evidenced by a pattern of higher highs and higher lows.
Finally, Phase E is the breakout phase, where the market embarks on a new uptrend, rewarding the accumulation efforts of large interests as the price significantly appreciates.
According to the Mags, the altcoin market cap has entered Phase ‘E’ of this pattern, characterized by a transition from accumulation to a potential price surge.
The #Altcoin Market Cap has broken out of a massive Wyckoff Accumulation Pattern.
Price is about to enter Phase “E’ which is where Alts will go vertical.
Altcoin Bull Market Incoming 🔥 pic.twitter.com/m2XeSoqGIm
— Mags (@thescalpingpro) February 12, 2024
Bitcoin vs. Altcoins Market Dominance
Furthermore, the Altcoins Season Index, a metric provided by Blockchain Center, currently stands at 49, implying a slight preference for Bitcoin in the market. However, the stage is set for altcoins to outshine Bitcoin in the coming months.
Notably, the Blockchain Center posits that an altcoin season is confirmed if 75% of the top 50 altcoins perform better than Bitcoin over 90 days.
Despite Bitcoin’s recent approach to the $50,000 mark, it has not sustained a close above this level, signaling an opportunity for altcoins to capture market interest. Though trailing slightly behind Bitcoin, the total market cap for altcoins hints at a burgeoning competition that could reshape the market landscape.
However, recent market trends have showcased Bitcoin’s notable performance compared to altcoins, with a more than 15% surge in the past week, leading its price to exceed $50,000 yesterday. Meanwhile, Ethereum has seen a 13% increase over the past week, yet it still trades below the $2,700 mark.
BNB and XRP recorded gains of 6.4% and 4.1%, respectively, during the same timeframe. However, Solana and Cardano have outperformed these figures, boasting gains exceeding 10%, trailing Bitcoin’s recent surge.
Yet, the aggregate market cap of altcoins, positioned just below $900 billion, against Bitcoin’s slightly higher valuation of above $950 billion, underscores a brewing contest for market dominance.
Featured image from Unsplash, Chart from TradingView