A chart analysis shows that the altcoin market has gone through two major cycles, each following a similar pattern of 5 upward waves (1-2-3-4-5) and 3 downward corrective waves (A-B-C). Let’s dive into how the current market cycle compares to the previous ones and what the future might hold for altcoins.
Key Observations from Past and Current Cycles
1. Cycle Duration
The ongoing cycle, which began around 2017, seems to be longer than the last one. This could be because cryptocurrencies have matured significantly and gained wider adoption across the globe. With increasing public awareness and more players in the market, cycles are now taking more time to play out.
2. Increased Volatility
This current cycle has seen greater price swings, especially during wave 3. A major reason for this could be the involvement of institutional investors and larger funds entering the crypto space, bringing massive inflows and outflows of capital.
3. Complex Corrections
The second wave of this cycle was more complicated than the second wave in the earlier cycle. This could be due to global economic factors like the pandemic, shifts in government policies, and economic uncertainty, which have deeply influenced the cryptocurrency market.
What Lies Ahead?
Based on the pattern of past cycles, here’s what could be next for the altcoin market:
1. Wave 5 Peak Approaching
Altcoins are currently in the late stages of the fifth and final upward wave of this cycle. Historically, this is when prices reach their peak before a correction begins. This means altcoins could still rally significantly before the cycle ends, with gains potentially crossing 180% for some.
2. Major Correction Likely
After wave 5 is complete, the market is expected to enter a downward phase, marked by three corrective waves (A-B-C). These corrections are often deep and lengthy, mirroring what happened in earlier cycles. This phase could bring a sharp drop in prices as the market cools off.
3. Buying Opportunities Ahead
While the correction might sound alarming, it’s also a chance for long-term investors. Once prices dip, the market will create excellent opportunities to accumulate altcoins at lower prices, setting the stage for the next cycle.
A Quick Comparison with History
The crypto market is evolving, and while past cycles give clues, no two cycles are exactly the same. The length, complexity, and volatility of each cycle depend on market conditions and global events. However, the overall structure of waves remains a reliable framework for analyzing trends.
Feel free to share which altcoins you’re holding, and we’ll analyze their potential performance in this cycle for you. Don’t miss the chance to prepare for what’s next in the market!
