A prominent crypto trader believes that altcoins may be entering an ideal accumulation phase, based on a rare buy signal that appeared at its lowest level in more than three years.
“Altcoins are currently at ‘sell your house to buy more’ levels,” trader Luke Martin told his 331,500 followers on X in an Aug. 28 post.
The last time an altcoin buy signal was near this level was in January 2021.
The “alts buy signal” chart provides traders with a key indicator of when the entire altcoin market is at a buy level based on historical data.
When Bitcoin hit similar levels in the summer of 2020, the price increased sixfold in the second half of that year, Martin said.
“The price skyrocketed from 10k to 60k over the next 6 months,” Martin wrote.
Meanwhile, anonymous trader Mags pointed out that “the altcoin market cap is forming a falling wedge pattern, a bullish continuation pattern.”
At the time of writing, the altcoin market cap is $195.07 billion, according to data from TradingView. Michael van de Poppe, founder of MN Consultancy, noted in an August 25 X post that the market cap is “still down 47% from its peak.”
The altcoin market capitalization peaked at $446.85 billion in November 2021.
Cryptocurrency trader Mags points to a potential major shift in altcoin market capitalization
“A breakout would trigger a strong rally,” Mags said.
Among the top 10 cryptocurrencies, Toncoin (TON) recorded the biggest drop over the past seven days, falling 15.31% to $5.57 after Telegram CEO Pavel Durov was arrested in France on August 24.
Other altcoins have also experienced sharp declines since their yearly peaks reached in March, coinciding with Bitcoin's all-time high at $73,679.
The price of Solana (SOL) has fallen 29% to $143.20 since its peak in March, while XRP has fallen 19.7% to $0.57.
Overall investor sentiment in the crypto market remains cautious, according to the Crypto Fear & Greed Index, with the current “Fear” score at 29, down 10 points from last week.
Meanwhile, Bitcoin dominance has slightly decreased by 0.12% over the past seven days, down to 57.20%. However, it is still not far from the 60% mark, which crypto analyst and Into The Cryptoverse founder Benjamin Cowen believes could be the peak of Bitcoin dominance.
“I don’t think it will go back to 70%, my target for Bitcoin dominance is 60%,” he explained.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
