A popular cryptocurrency analyst has recently pointed out a golden cross formation on a chart of the total market capitalization of digital assets, excluding the flagship cryptocurrency Bitcoin, known colloquially as altcoins, suggesting that these cryptocurrencies could soon enter a run. bullish.
In a post shared on microblogging platform seen in 2016 and 2020, and was then followed by a bull run.
When altcoins begin to outperform the flagship cryptocurrency Bitcoin, the cryptocurrency market enters what is known as alt season. Trading suggested that period is approaching the formation of a golden cross pattern, which is considered a bullish breakout pattern and is interpreted as a sign that a long-term bull market could soon occur.
According investopedia, there are three stages to reaching a golden cross, and the first requires a downtrend to eventually bottom out as selling dries up. The second stage occurs after the shorter moving average โforms a crossover through the larger moving average to trigger a breakout and confirmation of the trend reversal. โA third stage occurs with the continuation of an upward trend.
It is important to add that the volatility of the cryptocurrency market and its status as a relatively new asset class mean that relying solely on technical indicators such as the golden cross, which is based on past price movements, could be risky.
The prospect of an altcoin season could be supported by other data, including large cryptocurrency investors, known as whales, who have been accumulating stablecoins in recent weeks, to the point that they now control more than half of the combined stablecoin supply.
Taking a closer look at the activities of USDT holders, Santiment says holders of the third-largest cryptocurrency by market capitalization are sending their dollar-pegged digital assets to exchanges, and these inflows suggest they are preparing to buy in the market to an extent that could help drive up prices. According to the company, almost 4% of the USDT supply has returned to cryptocurrency exchanges.
Featured image via unpack.
