As the altcoin market enters a prolonged re-accumulation phase, there are signs that a big rally is on the way.
Though the market is currently in bear territory, past trends and analysis indicate that altcoins have huge potential to rise. According to crypto analyst Mikeybull, a 2020 price pattern is forming, suggesting a major price surge is imminent.
Altcoin re-accumulation phase
Market sentiment towards altcoins is currently bearish, with many investors taking a negative view of the market. However, this kind of sentiment is typical during altcoin re-accumulation phases, which occur just before the market reverses. Supporting this view, DeFi analyst Cyril points out that the current adverse sentiment is a typical setup for a major market rally.
He stresses that the time to de-risk was not now, but earlier in the cycle, as the market was simply rejected from its original target and further targets remain.
Moreover, he has observed that each major bull cycle has ended with a significant drop in Bitcoin’s market share, creating a huge opportunity for the altcoin market, which he believes will happen in the coming months and is likely to peak in October 2025.
According to the analyst, while market makers may be trying to fool investors by saying the bull market is over, the current re-accumulation phase shows signs to the contrary. Cyril expects sellers who are forced to sell at lower prices to buy back at higher prices, which supports the idea of altcoins surging.
Technical Indicators and Historical Patterns
Technical analysis also supports the bullish market outlook for altcoins. The 50-day and 200-day moving averages (MAs) are indicating a bullish trend, but the recent price action has been approaching these MAs, indicating a sideways movement. However, as can be seen from the chart, the price has been making higher lows and the MACD has been making lower lows, indicating that the bullish trend may continue.
Moreover, according to Mikeybull, the market is currently in a consolidation phase, where prices have broken through the short-term MAs but remain above the long-term MAs. This phase usually precedes a “final drop”, but is characterized by selling by the bears, paving the way for a new bullish phase.
Historical data shows that in previous cycles with similar technical setups, altcoins have seen large price increases. For example, according to crypto analyst Michael van de Poppe, altcoins such as Solana (SOL), Fetch.ai (FET), and RenderToken (RNDR) saw increases of 500%, 650%, and 300%, respectively, in previous cycles.
According to a report by Coingape, trending altcoins that are leading this rally this time and set to see gains of 20,000% include LayerZero (ZRO), zkSync (ZK), and Solana (SOL).
Gaussian Channel suggests a breakout
If we then compare the current market to past cycles such as 2017 and 2021, striking similarities become apparent. Both periods began with a consolidation phase followed by a rapid parabolic rise in market cap. These formations typically indicate accumulation and growing buying pressure, leading to a breakout.
The current market structure mirrors these historical patterns, with a consolidating triangle formation and strong baseline support.
If this pattern holds, another strong upswing is expected in the forecast for 2024. Additionally, the three-week Gaussian channel recently turned from red to green, signaling a transition from bearish to bullish conditions. Historically, such transitions have preceded strong market rallies.
Read also: Top 4 Altcoins to Buy That Could Reach a $100 Billion Market Cap
