A popular cryptocurrency analyst has recently pointed to a golden cross formation on a chart of the total market capitalization of digital assets excluding the flagship cryptocurrency Bitcoin – colloquially known as altcoins – suggesting these cryptocurrencies could soon enter a bull run.
In a post shared on the microblogging platform X (formerly known as Twitter), a pseudonymous cryptocurrency analyst going by Moustache told their over 90,000 followers that altcoins“ are on the verge of a golden cross,” a chart pattern that was seen back in 2016 and 2020, and that was then followed by a bull run.
When altcoins start outperforming the flagship cryptocurrency Bitcoin, the cryptocurrency market enters what’s known as alt season. The trade suggested that such a period is coming over the formation of a golden cross pattern, which is considered a bullish breakout pattern and is interpreted as showing a long-term bull market could soon occur.
According to Investopedia, there are three stages to a golden cross, with the first one requiring a downtrend to eventually bottom out as selling is depleted. The second stage comes after the shorter moving average “forms a crossover up through the larger moving average to trigger a breakout and confirmation of trend reversal. “ A third stage occurs with the continuation to an uptrend.
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It’s important to add that the crypto market’s volatility and its status as a relatively new asset class mean that relying solely on technical indicators like the golden cross, which is based on past price movements, could be risky.
The prospect of an altcoin season could be backed by other data, including large cryptocurrency investors, known as whales, having been accumulating stablecoins over the last few weeks, to the point that they now control over half of the combined stablecoin supply.
Taking a closer look at the activities of USDT owners, Santiment says holders of the third-largest crypto by market cap are sending their dollar-pegged digital assets to exchanges, with these inflows suggesting they’re gearing up to buy into the market in a move that could help drive prices up. Per the firm nearly 4% of USDT’s supply has moved back to cryptocurrency exchanges.
Featured image via Unsplash.
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- Source: https://www.cryptoglobe.com/latest/2024/01/alt-season-crypto-analyst-points-to-bullish-golden-cross-pattern-on-altcoin-market-cap-chart/
