Altcoins Reclaim Key Trendline: Will 2021’s Explosive Rally Repeat?
altcoin Market Signals Potential for Major Breakout
Altcoins Set for Significant Upsurge as Bearish Trends Fade
Recent analysis indicates that the altcoin sector may be on the verge of a substantial breakout, reminiscent of previous explosive rallies. After a prolonged period of market uncertainty and price stabilization, altcoins have reportedly regained a crucial trendline that historically signaled the onset of bull markets in 2017 and 2021. Analysts are now pondering whether the current conditions are favorable for another significant altcoin surge.
Historical Patterns Suggest a Bullish Turn
Crypto analyst Merlijn The Trader has drawn intriguing comparisons between the current market cycle and those of 2017 and 2021. His recent chart analysis, shared on social media platform X, illustrates that the total market capitalization of altcoins has successfully reclaimed a long-term ascending trendline, which has previously preceded major upward movements during bull runs.
In past cycles, altcoins have momentarily breached this trendline, often identified as a “bear trap,” before quickly reversing course and entering phases of explosive growth. The Trader notes that this pattern appears to be repeating itself, as the current market structure closely resembles setups from previous cycles that led to rapid increases in altcoin valuations.
The recovery of the ascending trendline is highlighted within a designated area on the chart, aligning with previous zones that marked the conclusion of downtrends. Historically, such recoveries have been followed by aggressive upward movements, indicated by areas on the chart that represent significant gains in total market capitalization.
Indicators Point to Renewed Bullish Momentum
Merlijn The Trader posits that the recent market rebound signals the conclusion of yet another bear trap, suggesting a resurgence of bullish momentum. The chart features green arrows positioned below the price curve, corresponding with the timing of earlier breakouts, indicating that the altcoin market may be gearing up for another expansion phase. If historical patterns hold true, the analyst anticipates a sharp upward rally for altcoins, with market valuations potentially soaring to between $10 trillion and $16 trillion.
altcoin Market Reflects 2016-2018 Breakout Dynamics
In a separate analysis, Merlijn The Trader has observed that the altcoin market capitalization is mirroring a historical pattern that previously triggered a major bull rally. A comparison between the current market cycle and the one from 2016 to 2018 reveals striking similarities in structure, albeit on a larger scale.
The market seems to have formed a Double Bottom, followed by a mid-cycle correction and consolidation within a descending broadening wedge pattern. This same fractal was evident before the explosive altcoin rally of 2017. The Trader’s chart illustrates that in the previous cycle, altcoins broke free from this wedge pattern, resulting in a significant surge in market capitalization, which he referred to as “Pump 2.0.”
With the current breakout now confirmed within this cycle’s market structure, Merlijn The Trader predicts that the altcoin sector may be entering a new phase of parabolic expansion. This development could signify the end of the ongoing bear phase and the beginning of a second macro pump, akin to the remarkable growth witnessed between 2017 and early 2018.
