Altcoins will bottom in early summer before bull run — Analyst
Bitcoin aside, the cryptocurrency market could find its local bottom in June, marking the start of the next altcoin bull cycle, according to market analysts.
Altcoin bottom could occur in June — Analyst
Based on historical chart patterns, altcoins could be set to find their local price bottom around the beginning of June, according to popular crypto analyst Rekt Capital, who wrote in a May 8 X post:
“Altcoins are following the plan perfectly. Altcoins bottomed in early February. Altcoins sold off around the BTC Halving. Altcoins to bottom early summer.”
The altcoin market took a beating in the past month. The market cap of altcoins, excluding the 10 largest cryptocurrencies, fell over 21% during the previous month to $265 billion.
Despite the monthly slump, the altcoin market cap is still up over 24% year-to-date (YTD) and over 167% during the past year.
Altcoin sentiment is historically correlated with the Bitcoin (BTC) price. Altcoins could find their local bottom around June, as market sentiment and the Bitcoin price remain subdued by decreasing inflows from United States spot Bitcoin exchange-traded funds (ETFs), according to Alex Onufriychuk, blockchain adviser and coach at Qubic Labs Accelerator. He told Cointelegraph:
“There is a possibility that they could find their local bottom by June due to the lack of sufficient new liquidity from Bitcoin ETFs in the U.S. and Hong Kong. This indicates that the consolidation period may be prolonged.”
Related: Did XRP price just bottom against Bitcoin?
Bitcoin breakout will spark altcoin bull cycle — Nansen
Despite seeing a potential local bottom, an altcoin bull run would first require Bitcoin price to break out to the upside, according to Aurelie Barthere, principal research analyst at Nansen, who told Cointelegraph:
“Altcoins are high beta crypto, they are successful when the sentiment is very bullish. Since mid-March, the sentiment among crypto investors is less exuberant. As BTC price consolidates around the 20-day exponential moving average, there is more volatility in alts. We need a break above and a clear resumption of BTC uptrend for alts to outperform.”
BTC price has been posting lower highs since mid-March. However, many analysts argue that this is a healthy period of consolidation after the halving. Moreover, the charts hint at a multimonth bull flag taking shape for new all-time highs later in 2024.
Since altcoin sentiment is strongly related to Bitcoin price, finding a local bottom wouldn’t necessarily translate into an altcoin rally, wrote Qubic Labs’ Onufriychuk:
“Even if altcoins find their local bottom around June, it does not necessarily mean that a bull run will start. For a significant turnaround, more fundamental changes are required, such as increased retail and institutional investment and favorable regulatory developments, given the scarcity of new liquidity and heavy reliance on institutional reinvestment into newer projects.”
On the monthly chart, 10 out of 12 moving averages (MA) are flashing a buy signal for the top altcoins, such as Ether (ETH), which has struggled. Moving average indicators are commonly used in technical analysis to determine the average price of the underlying asset in relation to a set period.
Altcoin prices could also rise due to the M2 money supply, which turned positive year-over-year for the first time since November 2023, signaling that investors could soon start looking for hedges against inflation or alternative investments.
The M2 money supply estimates all cash and short-term bank deposits across the United States.
As the money supply in the world’s largest economy increases, part of the new supply could find its way into altcoins and memecoins, contributing to the beginning of the “altszn.”
Related: Bitcoin distribution ‘danger zone’ over, analysts say
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
