The altcoin market is currently in the early stages of a major breakout. Technical indicators suggest that a significant rally could be the start of an altcoin season. Market analyst MikybullCrypto has noticed a cup and handle pattern on the overall altcoin market capitalization chart. This pattern is often considered a bullish signal. The breakout suggests that the altcoin market capitalization will rise to $2 trillion by the end of 2025, although current signs suggest that the market capitalization is still rising.
Cup and Handle Pattern Signals Bullish Breakout
The cup and handle formation means a two-year recovery from the bear market begins in early 2022. The cup at the bottom represents a market that is continually building and recovering, while the handle formed during the consolidation suggests an upcoming breakout. The company's market capitalization has surpassed $820 billion, signaling the start of the next leg of growth.
In the event that the breakout remains intact, the altcoin market could surge by a predicted 181.6%, setting the stage for one of the most significant bull runs in recent years. Furthermore, the bullish outlook correlates with increasing investor participation and therefore holds great upside potential for most altcoins.
Altcoin Dominance Highlights Shifting Dynamics
The altcoin market is starting to look stronger and there is a gradual shift in dominance. This shows an upward trend in altcoins other than Bitcoin and Ethereum in the Total Cryptocurrency Market Cap excluding the top 10 dominance figures.
Dominance has spiked to 9.67%, positioning above the downtrend line that has acted as resistance since early September.
This breakout shows continued investor interest in other smaller altcoins which is now seen as a sign of a new altcoin season. Altcoin dominance is trading near 9.80% and is finding resistance at 10.50%.
If these levels are broken, small-cap cryptocurrencies could potentially drive market growth. On the downside, dominance found support at 9.30% with 9.00% being the second support level.
The Relative Strength Index (RSI) is currently at 57.45, indicating that bullish pressure is building without being overbought. This suggests that there is still room for the asset to grow before a correction occurs, again supporting the bullish view on small-cap assets.
Altcoin Season Expected to Begin in Late November
This is more consistent with historical market sentiment and price action. It shows the start of altcoin season from November of the following year to March of the following year.
During this period, we expect altcoins to outperform larger coins, such as BTC and ETH, due to capital flight from larger-cap coins.
In the past, altcoin seasons have occurred when there has been a strong bull run. Altcoins have performed relatively better than the top cryptocurrencies when BTC prices have stabilized. However, the projected $2 trillion altcoin market cap stems from the depth of the cup and handle pattern. This is a technical setup with a strong track record of accuracy.
Important Levels to Watch
In the bullish zone, dominance reached 10.50%. Market capitalization reached $2 trillion, indicating further breakout from the small-cap altcoin side.
However, a bearish scenario could play out if the breakout fails to hold, leading to a potential pullback. Any support level above $600 billion is considered relatively safe as it provides the market with solid support in case of a price decline.
