The major crypto asset has successfully hit a new all-time high in 2020, but the promised altcoin season that would follow is nowhere to be found. And with Bitcoin’s momentum and an overdue correction, the lack of strength in altcoins could cut the total crypto market cap in half without BTC, from $ 200 billion to $ 100 billion.
This is why a short term bearish pattern could lead to a breakdown of current levels and a new support test below, as well as why the true alt season is nearing and could eventually lead to a $ 6 trillion market cap .
2020 is the year of Bitcoin’s comeback, but the rest of Crypto is lagging behind
2020 was the year Bitcoin matured as a regular financial asset. Hedge funds are now in the process of reallocating gold to the cryptocurrency and so are companies exchanging cash for BTC to protect corporate treasuries of the coming hyperinflation.
And while Bitcoin is extremely bullish and some of it has recently expanded into the broader crypto market, boosting Ethereum, Ripple and Litecoin higher, they have failed to perform better the most dominant cryptocurrency as they had in the past when it hit a new peak.
During the latest bull run, as soon as Bitcoin set a new record, the money flowed to altcoins so quickly that they exploded in value. The rally caused BTC dominance to fall off a cliff, and the crypto bubble began to fill with hot air.
Market parties that have experienced this in the past have expected lightning to strike twice for altcoins, but it would require a new record in Bitcoin first.
That moment is now over, but alts are not only rising, but they are also at risk of seeing a nearly 50% collapse, according to technical analysis. However, the same technical details suggest that this is one of the last remaining fixes in the altcoin market before the real high season arrives.
Altcoins could retrace by as much as 50% to confirm support if wedge breaks down | Source: CRYPTOCAP-TOTAL2 on TradingView.com
The total altcoin market cap consisting mainly of the top ten crypto assets including Ethereum, Ripple, Litecoin, Chainlink and more is showing a bearish structure. The ascending wedge pattern usually breaks down, resulting in a lower fall.
Larger, high timeframe bullish patterns dominate the short-term bearish signal | Source: CRYPTOCAP-TOTAL2 on TradingView.com
The next Altcoin Season can lead to a market cap of $ 6 trillion
While the specific pattern is bearish, it is just one pattern in a slew of high timeframe price action different bullish patterns. All recent price action has been sandwiched between three levels of major support and resistance levels, where breaking the wedge could cause a retest of the median one last time before taking the next higher level.
There is also one in the zoomed out version Adam and Eve false bottom (trend lines dotted red), and a possible inverted head and shoulders that would form the right shoulder. The right shoulder would also look like a giant’s handle part cup and handle continued pattern.
Could the next alt season take the sub-category to a $6 trillion cap? | Source: CRYPTOCAP-TOTAL2 on TradingView.com
Markets often reverse symmetrically, as the massive rounded bottom in Bitcoin around 2013 to 2015 demonstrated. The whole rounding of the bottom and saucer-like pattern would create a perfect semicircle, but only if the correction is complete and the lower support is retested.
Analysts expecting altcoins perform exactly like last time, remember that the same ultra-strong bearish resistance was not above most of these assets at the time, and thus entered pricing mode much earlier.
Currently, most altcoins are still well below 50% or more of their previous all-time high, and according to the bearish wedge, they are likely to drop another 50% from here.
Altcoins could be ending the third wave and beginning the fourth, corrective subwave | Source: CRYPTOCAP-TOTAL2 on TradingView.com
But in the last chart, as part of this long-term analysis of the peak season, Elliott Wave Theory combined with a comparison of the last market cycle could indicate that the current end of the rally would close wave three, and the correction would complete wave four. , which caused altcoin market to enter the latest fifth wave – the biggest and longest bullish momentum to a new record ever. The move would also be more reminiscent of the “alt seasonWhich analysts drool over.
At the end of it, assuming a measured displacement of the height of the rounded pattern, a market cap of $ 6 trillion is possible for all altcoins within the next two years.
Featured image from Deposit Photos, Charts from TradingView.com