6 May 2024
Over the weekend, the crypto market started recovering from the largest retrace of this bull cycle. The strong correction caused Bitcoin and the altcoins market to drop to levels not seen since February.
While some sectors of the crypto community felt like the bull run was over or needed to “cool-off”, others seemed optimistic about the cycle’s future. Now that the market is back from the correction, analysts foresee that the altcoin season might come soon.
Is The Correction Phase Over?
Over the weekend, crypto analyst and trader MilkybullCrypto shared with his X followers that the Altcoins market capitalization was at “an RSI level that initiates an explosive rally.”
Per his chart, this level is a “reset for a healthy rally,” as seen in 2016 and 2020. During these two cycles, when the altcoins reached this level, a “huge rally” followed.
The analyst shared his latest forecast on Monday after seeing the market strengthen its recovery. To Milkybull, the altcoins market cap finished a “Heatly retest.”
The market displayed a similar correction during the 2020-2021 rally before skyrocketing to all-time high (ATH) levels. The chart seems to display the same performance, which could mean that altcoins are “in preparation for an explosive rally,” if history repeats itself.
Similarly, crypto trader and analyst Captain Fabik considers the “Healthy Correction is done.” In his X post, the analyst identified a bullish falling wedge pattern, which signals a “bullish rally incoming.”
Altcoins “Cool-Off” Or “Euphoria” Incoming?
According to analyst and trader Rekt Capital, the Altcoin market cap, excluding the top 10 cryptocurrencies, has “successfully retested the $250 billion level as a support level” over the last several weeks.
Per the trader, the altcoins are following the proposed path of his “Ultimate Altcoin Market Cap Game Plan For The Coming Months.” On this plan, Rekt Capital forecasted altcoins market cap would surge to the $315 billion level before retracing back to the $250 billion mark. This retrace would be followed by an explosive surge above the $440 billion market capitalization.
Altcoins have stayed above the $250 billion support zone despite the strong corrections, as seen in the chart below. To the analyst, this suggests the market is “now showing initial signs of trying to curl up from here.”
Renowned figures have expressed their “disappointment” in altcoins’ performance this cycle. Altcoin Sherpa considers that “many alts didn’t even run that hard over the last few months,” which could suggest that it’s time for a “cool-off.” At the time, the analyst deemed altcoins’ rally was “done” for the next 1-4 months.
However, others believe the “euphoria phase” for altcoins is coming. According to Crypto Yhodda, “The alts will rise again, and by the end of 2024, they will go crazy.” Moreover, the analyst believes that “Altcoins Cycle III” will give us some crazy pumps.
According to his chart, the altcoins’ cycle I and II displayed a symmetrical triangle pattern before the breakout. The surge was followed by a slowdown before the upward trajectory continued, called “Round 1” by the analyst.
Subsequently, the rally would repeat the pattern on a second round before reaching the cycle’s top. “Cycle III” appears to be in the middle of Round 1, which suggests to the analyst there is a long road ahead before it “hits the euphoria phase.”