Altcoin Market Shows Signs of Potential Breakout as Accumulation Phase Emerges

A key buy signal for altcoins is now flashing, drawing parallels to Bitcoin’s massive sixfold rally in 2020, according to a prominent crypto trader.

Crypto trader Luke Martin believes altcoins may be entering a prime accumulation phase. He highlighted a buy signal, which hasn’t triggered this low in over three years, in an Aug. 28 post to his 331,500 followers on X.

“Altcoins are currently at the ‘sell your house to buy more’ level,” Martin remarked. He referenced the “alts buy signal” chart, which uses historical data to indicate when the broader altcoin market is at a favorable buying level. Martin pointed out that in 2020, Bitcoin was at a similar level before surging from $10,000 to $60,000 within six months.

“Price went vertical from 10k to 60k over the next six months,” Martin wrote, emphasizing the potential for a strong rally.

Another crypto analyst, the pseudonymous trader Mags, noted that the altcoin market cap is forming a falling wedge pattern, a bullish indicator often associated with continuation patterns.

As of this writing, the total market cap of altcoins stands at $195.07 billion, based on TradingView data. Michael van de Poppe, founder of MN Consultancy, pointed out in an Aug. 25 X post that the market cap is still 47% below its all-time high of $446.85 billion, reached in November 2021. Mags added, “A breakout from this pattern could lead to a significant upside rally.”

In terms of individual performance, Toncoin (TON) has seen the steepest decline among the top 10 cryptocurrencies, dropping 15.31% over the past week to $5.57. This came after the Aug. 24 arrest of Telegram CEO Pavel Durov in France. Other altcoins have similarly struggled since their March highs, which coincided with Bitcoin’s all-time high of $73,679.

Solana (SOL) has dropped 29% to $143.20, while XRP (XRP) has fallen 19.7% to $0.57, according to data from CoinMarketCap.

Despite some signs of weakness, investor sentiment remains cautious, as reflected in the Crypto Fear & Greed Index, which shows a “Fear” score of 29, down 10 points from a week earlier.

Bitcoin’s dominance in the market has also seen a slight dip, falling 0.12% over the past week to 57.20%. However, it is approaching 60%, a level that crypto analyst Benjamin Cowen believes could represent the peak for Bitcoin dominance. “I don’t see it going back to 70%, my target has always been around 60%,” Cowen explained.