Apart from Bitcoin's current decrease to $62,756, analysts suggest that the cryptocurrency market might discover its lowest point in June, signaling the beginning of the next altcoin bull cycle.
Analyst: June could be the Altcoin bottom
Crypto analyst Rekt Capital suggests that based on historical chart patterns, altcoins are likely to reach their local price bottom around the start of June. Rekt Capital outlined this prediction in a post on X, noting that altcoins followed a pattern of bottoming in early February, experiencing a sell-off around the Bitcoin Halving, and potentially bottoming again in early summer.
During the previous month, the altcoin market faced significant declines, with the market capitalization of altcoins, excluding the top 10 cryptocurrencies, dropping by over 21% to $265 billion.
Despite this recent downturn, the year-to-date (YTD) performance of the altcoin market remains positive, with a growth of over 24%. Over the past year, altcoins have surged by more than 167%.
Altcoin sentiment is typically linked to Bitcoin's price movement. The subdued sentiment surrounding Bitcoin, coupled with decreasing inflows from U.S. spot Bitcoin exchange-traded funds (ETFs), could contribute to altcoins finding their local bottom around June. According to blockchain advisor and coach Alex Onufriychuk from QUBIC Labs Accelerator, the limited new liquidity from Bitcoin ETFs in the U.S. and Hong Kong may prolong the consolidation period for altcoins.
Altcoin bull cycle will be sparked by Bitcoin breakout: Nansen
According to Aurelie Barthere, principal research analyst at Nansen, the potential for an altcoin bull run hinges on Bitcoin's price breaking out to the upside. Barthere emphasizes that altcoins typically thrive in a very bullish market sentiment, but since mid-March, sentiment among crypto investors has been less exuberant. With Bitcoin's price consolidating around the 20-day Exponential Moving Average (EMA), altcoins have experienced increased volatility. Barthere suggests that for altcoins to outperform, there needs to be a clear uptrend in Bitcoin's price.
While Bitcoin's price has been forming lower highs since mid-March, many analysts view this as a healthy period of consolidation following the halving. Additionally, chart analysis indicates the formation of a multi-month bull flag, hinting at the possibility of new all-time highs later this year.
Alex Onufriychuk from QUBIC Labs also notes that finding a local bottom for altcoins in June may not necessarily lead to a bull run. He explains that significant changes are needed, such as increased retail and institutional investment and favorable regulatory developments, given the current scarcity of new liquidity and reliance on institutional reinvestment into newer projects.
On the technical side, 10 out of 12 moving averages (MA) on the monthly chart are signaling a buy for top altcoins like Ether (ETH). Moving average indicators are commonly used in technical analysis to gauge the average price of an asset over a specified period.
Another factor that could drive altcoin prices higher is the positive year-over-year change in the M2 money supply, which indicates a potential increase in investor interest in hedges against inflation or alternative investments. The M2 money supply represents all cash held and short-term bank deposits in the United States.
As the money supply in the US grows, a portion of the new supply could flow into altcoins and memecoins, potentially signaling the beginning of the "altszn" (altcoin season).
May 2024, Cryptoniteuae