Altcoins have witnessed a significant rise recently, with their collective market capitalization increasing from $575 billion to $615 billion in just a few days – an increase of 7%. This momentum indicates the potential for further growth in the Altcoin sector.
Escape from the descending triangle
The Altcoin Market capitalization has been trading within a descending triangle pattern since its annual peak in April. This technical pattern, characterized by a series of lower highs but consistent lows, typically indicates bearish sentiment – suggesting that each rally is accompanied by increasing selling pressure, keeping upward price movements in check.
Related Reading: November Bitcoin Price Outlook: Another Pump or Pullback?
However, last weekend marked a crucial change. The market capitalization decisively broke the upper resistance line of the pattern and rose by 7%. Such a breakout from a descending triangle is a bullish pattern, which often indicates a reversal of the previous downtrend. With this breakout, the market cap is now targeting the pattern’s initial peak, which could mean an additional 7% upside.
Altcoin market capitalization. Source: TOTAL2 from TradingView
The significance of this breakout is further highlighted by the fact that Altcoin’s market capitalization has not only broken through resistance but also surpassed the previous high set in July. This break could indicate that the market is transitioning from a bear-dominated phase to a bullish phase, where buyers regain control and push the market to new highs.
Bitcoin is waning dominance
Bitcoin’s market dominance recently fell to 52.50%, down from its annual peak of 54%. This is a normal market fluctuation as Bitcoin has been going through a period of increasing dominance for ten weeks.
Related reading: Bitcoin Season: Leading the Crypto Market
Still, it is crucial to note that Bitcoin’s market share has fallen below the crucial 53% support level. Should Bitcoin fail to regain dominance above this support level, we can expect a further decline to the next support of 49%, opening the door for Altcoins to capture a larger share of the cryptocurrency market cap.
In bear markets, Bitcoin’s dominance tends to increase as the market retreats, suggesting that if Bitcoin manages to maintain or increase its price, Altcoins could see further rallies.
Bitcoin dominance (market share % in the cryptocurrency market) on the weekly chart. Source: BTC.D from TradingView
Conversely, a rise above the 53% support could put Bitcoin ahead of the next resistance at 58%, eating into Altcoins’ market share.
Historically, bull markets often start with Bitcoin leading the way due to events such as the halving, which reduces the inflow of new Bitcoin.
Nevertheless, there are still phases where Altcoins are rapidly gaining momentum and experiencing significant and rapid price increases. The current market breakout, along with a reduction in Bitcoin’s dominance, indicates that such a phase may now occur.
Top Altcoins Profits
Over the past week, many Altcoins have witnessed remarkable gains. These are the top performers:
- Pancake swap: +95%
- Trust Wallet Token: +53%
- Neo: +48%
- MultiversX: +46%
- Blur: +45%
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Featured image from ShutterStock, charts from TradingView.com