Recent indicators from the altcoin market hint at a repeat of the explosive rallies witnessed in the past, as per the latest analysis. After a period of price volatility and consolidation, altcoins seem to have reclaimed a crucial trendline that previously signaled the start of the 2017 and 2021 bull runs. As market patterns and fractals start to align, crypto analysts are speculating whether the stage is set for another major altcoin surge.
Altcoins on the Verge of a Historic Breakout as Bear Trap Concludes
According to a chart analysis by renowned crypto specialist Merlijn The Trader, the altcoin market could be on the cusp of a remarkable breakout. The expert compares the current cycle with those of 2017 and 2021, illustrating that the total altcoin market capitalization has regained a long-term ascending trendline that has historically preceded major bull runs.
In prior cycles, altcoins temporarily breached this trendline in what was considered a “bear trap,” before quickly reversing and initiating periods of explosive growth. Merlijn The Trader discloses that this pattern seems to be repeating itself in the current cycle, with the market structure closely resembling previous scenarios that fueled swift increases in altcoin valuations.
The recovery of the ascending trendline is highlighted within a red box in the chart, corresponding with areas that marked the conclusion of previous downtrends. In each case, the recovery was succeeded by aggressive upward movement, signified by green boxes representing parabolic gains in total market cap. The recent rebound, according to Merlijn The Trader, might indicate the end of another bear trap, signifying a resurgence of bullish momentum. If the historical pattern holds, the analyst anticipates a significant vertical rally for altcoins, with valuations potentially reaching between $10-$16 trillion.
Altcoin Market Echoes Breakout Pattern of 2016-2018
In another recent analysis, Merlijn The Trader points out that the altcoin market cap appears to be replicating a historical pattern that previously resulted in a significant bull run. A side-by-side comparison of the 2016-2018 market cycle and the present one reveals a similar structure unfolding, albeit on a far greater scale.
It seems the market has formed a Double Bottom, trailed by a mid-cycle correction and consolidation inside a descending broadening wedge pattern. This identical fractal was observed before the 2017 altcoin rally. The chart also shows that in the previous cycle, altcoins escaped this wedge pattern, resulting in a substantial increase in market cap, dubbed as “Pump 2.0”.
With the same breakout now evident in the current market structure, Merlijn The Trader suggests that the altcoin sector might be stepping into its next parabolic expansion phase. This progression could indicate the end of the altcoin market’s current bear phase and the initiation of a second macro pump, akin to the one that took place between 2017 and early 2018.
