A renowned crypto analyst on X has recently sparked discussions within the altcoin community by predicting an imminent “altcoins bull market.” This anticipation is rooted in observing a notable pattern in the altcoin market cap chart.
Accumulation Pattern Suggests Bull Market Incoming
According to the crypto analyst Mags on X, the market capitalization of cryptocurrencies, excluding Bitcoin, has reached a crucial stage in the Wyckoff Accumulation Pattern, hinting at potential upward momentum shortly.
For context, the Wyckoff Accumulation Pattern, named after Richard D. Wyckoff, a pioneering early 20th-century trader, is used to identify the stages of a market bottom when institutional investors accumulate an asset before the start of a new uptrend.
The Wyckoff Accumulation pattern typically unfolds in five phases (A), designed to highlight how large professional interests prepare an asset to be moved into a substantial markup phase.
Phase A signals the halt of the previous downtrend, marked by initial demand indicating that the market is ceasing to make lower lows. Phase B is characterized by testing, as institutions absorb supply amid volatile price action, including potential false breakouts.
Phase C features a key test of the lows through a “Spring” or “Shakeout,” allowing smart money to acquire an asset from retail holders at lower prices. This phase confirms the market’s readiness to advance. Phase D sees the start of the uptrend as demand takes control, evidenced by a pattern of higher highs and higher lows.
Finally, Phase E is the breakout phase, where the market embarks on a new uptrend, rewarding the accumulation efforts of large interests as the price significantly appreciates.
According to the Mags, the altcoin market cap has entered Phase ‘E’ of this pattern, characterized by a transition from accumulation to a potential price surge.
The #Altcoin Market Cap has broken out of a massive Wyckoff Accumulation Pattern.
Price is about to enter Phase “E’ which is where Alts will go vertical.
Altcoin Bull Market Incoming 🔥 pic.twitter.com/m2XeSoqGIm
— Mags (@thescalpingpro) February 12, 2024
Bitcoin vs. Altcoins Market Dominance
Furthermore, the Altcoins Season Index, a metric provided by Blockchain Center, currently stands at 49, implying a slight preference for Bitcoin in the market. However, the stage is set for altcoins to outshine Bitcoin in the coming months.
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