Explosive Altcoin Rally Predicted: Analysts See Powerful Run Since 2017

Are Altcoins on the cusp of a significant move? According to some market analysts, conditions are aligning for what could be the most powerful Altcoin Rally the market has seen since the monumental bull run of 2017. Recent data points, including shifts in the Crypto Market Cap and key index movements, are fueling this optimistic outlook.

Analyzing the Potential for an Altcoin Rally

The second quarter of the year saw the total Crypto Market Cap for altcoins (excluding Ether) increase by a substantial $126 billion. This growth has captured the attention of analysts who have been anticipating an ‘altseason’. Veteran crypto analyst Javon Marks recently highlighted a chart comparing the TOTAL3 index – which tracks the total market capitalization of cryptocurrencies excluding Bitcoin (BTC) and Ethereum (ETH) – against the US money supply.

Marks suggests this comparison indicates altcoins may be nearing a significant upward movement. A rising TOTAL3 relative to the US money supply can indicate that altcoins are appreciating in value faster than the overall liquidity in the US economy, suggesting increased investor interest and capital flowing into this sector.

Chart Patterns Supporting the TOTAL3 Outlook

Beyond the money supply comparison, technical patterns on the charts also support a bullish case for altcoins. Javon Marks noted that altcoins have successfully retested a critical breakout level against the US money supply, bouncing back strongly. This retest and bounce scenario is often seen as a confirmation of the initial breakout, suggesting further upward potential.

Similarly, another analyst known as Moustache pointed out a weekly inverse head-and-shoulders pattern forming on the TOTAL3 chart. This pattern is widely regarded as a bullish reversal signal. Comparing the current market structure to the 2021 cycle, Moustache’s analysis suggests that if the pattern plays out, altcoins could see substantial gains, potentially mirroring or even exceeding past performance where top altcoins significantly outperformed Bitcoin.

Considering the Impact of Bitcoin Dominance

While the signs from TOTAL3 and chart patterns are encouraging, not all analysts share the same level of immediate optimism. Some analysts urge caution, pointing to other market indicators that have yet to confirm a full-fledged altseason. One key factor often cited is Bitcoin Dominance.

Bitcoin Dominance measures Bitcoin’s market capitalization relative to the total cryptocurrency market capitalization. A high or rising Bitcoin Dominance typically means capital is flowing into or staying primarily within Bitcoin, while a declining dominance often precedes or accompanies an altcoin rally as capital rotates from BTC into altcoins. Currently, Bitcoin Dominance is above 60%, and its weekly uptrend remains intact. Analysts like DonaXBT argue that a significant breakdown in this trendline, potentially falling below 60% and retesting the 56%-58% zone, is necessary for altcoins to experience a truly substantial move.

Volume and the Altcoin Season Index

Further data from CryptoQuant regarding trading volume provides another perspective. Altcoin spot trading volumes, while showing early signs of recovery, remain relatively low compared to previous market peaks. Daily volumes are averaging $3-$5 billion, whereas they were significantly higher, between $8-$12 billion, in late 2024. Lower volume during the early stages of a potential rally can indicate that momentum is still building and a peak is yet to be reached.

The Altcoin Season Index, provided by Blockchaincenter.net, also reflects the current market state. The index is presently at 24, which historically indicates that the market is in ‘Bitcoin Season’ (typically below 25). However, this low index value can also be seen as a setup for altcoins. As capital begins to rotate out of Bitcoin, the index tends to climb above 30-40, often coinciding with significant pumps across the altcoin market. The combination of recovering volumes and a low Altcoin Season Index suggests that while not fully in altseason yet, the conditions for a potential shift are developing.

Conclusion: Potential and Caution for Altcoins

The indicators discussed, from the growth in Crypto Market Cap and the bullish patterns on the TOTAL3 chart to the potential signals from volume data and the Altcoin Season Index, paint a picture of brewing potential for Altcoins. Analysts like Javon Marks see the possibility of a historic rally. However, the market is not without its counterarguments, particularly concerning Bitcoin Dominance and the need for increased trading volume to confirm a sustained move.

Investors are watching closely to see if the bullish patterns prevail and if capital rotation from Bitcoin triggers the anticipated ‘most powerful rally’ since 2017. As always, market analysis involves risk, and individuals should conduct their own research.