Let’s dive into the vast universe of altcoins, which are making waves in the crypto market with speculations of a bullish inverse head-and-shoulders pattern. The pattern, when completed, may signal the beginning of the coveted “alt season”, anticipate some traders, where altcoins outshine crypto giants such as Bitcoin, Ether, and others.
A bit of a primer – the head-and-shoulders pattern is an esteemed indication among bull markets and signifies three price troughs, with the central one being the lowest. The cycle is verified when prices surge over the trendline connecting the lows, signaling a bearish-to-bullish trend transformation.
But how does it reflect in the altcoin’s daily market cap chart? The left shoulder was created in June 2022 at $188.4 billion, followed by a $173.23 billion low in December, with the right shoulder appearing at $177.36 billion in June this year. The rally from the right shoulder seems to have paused for the past three weeks hovering around $230 billion, and will only reach completion once it surpasses the neckline resistance near $300 billion.
Yet there’s a touch of scepticism amongst traders. As one, Josh Olszewicz, states, he isn’t convinced by the head-and-shoulders pattern that seems rooted in the middle of consolidation. The scenario that wins him over is one that sees the market cap cross the $300 billion mark.
Interestingly, this developing pattern seems paradoxically juxtaposed against the consumer market. Google search queries for altcoins show receding interest, portraying a lukewarm public sentiment.
The prognosis is thus two-pronged. We either see the altcoin market cap drop from the present point, thus repudiating the potential head-and-shoulders pattern. Alternatively, we could witness the market cap escalate beyond $300 billion, heralding the arrival of the “alt season”. As spectators in this intricate dance of altcoins and the market cap, we can only wait and observe which scenario ultimately unravels.
To put it succinctly, in the unpredictable world of crypto, the altcoin market cap might turn into a significant indicator for future trends. Whether it paves the way for the “alt season” or merely adds to the tumultuous uncertainty, only time will reveal.
Source: Coindesk
