According to market analysts, with the exception of Bitcoin, cryptocurrency markets could find a local bottom in June, which could signal the start of the next altcoin bull cycle.
Altcoin Bottom Could Happen in June – Analyst
Based on historical chart patterns, altcoins could be set to find a local price bottom in early June, according to prominent cryptocurrency analyst Rekt Capital, who wrote in an X post on May 8.
“Altcoins are following the plan perfectly. Altcoins bottomed out in early February. Altcoins were sold off around the time of the BTC halving. Altcoins will hit bottom in early summer.”
The altcoin market has taken a huge hit over the past month. Excluding the top 10 cryptocurrencies, altcoin market capitalization recorded $265 billion, down more than 21% from the previous month.
Despite the monthly slump, altcoin market caps are still up more than 24% year-to-date and over 167% over the past year.
Altcoin sentiment has historically been correlated with Bitcoin (BTC) price. According to Alex Onufriychuk, blockchain advisor and coach at Qubic Labs Accelerator, altcoins have fallen by 6 as inflows from U.S. spot Bitcoin exchange-traded funds (ETFs) have declined, leading to market sentiment and Bitcoin prices remaining depressed. It is said that you will be able to find a local floor during menstruation. He told Cointelegraph:
“There is not enough new liquidity from Bitcoin ETFs in the US and Hong Kong, so there is a possibility of a local bottom by June. “This means the integration period could be longer.”
Related: Has XRP price bottomed against Bitcoin?
Bitcoin Breakout Will Trigger Altcoin Bull Cycle — Nansen
Aurelie Barthere, senior research analyst at Nansen, told Cointelegraph:
“Altcoins are high-beta cryptocurrencies, and they succeed when sentiment is very bullish. Sentiment among cryptocurrency investors has become less lively since mid-March. As BTC price consolidates around its 20-day exponential moving average, alternatives have become more volatile. A break above and a clear resumption of the BTC upward trend is needed for alternatives to outperform.”
BTC price has been at its lowest since mid-March. However, many analysts argue that this is a period of healthy consolidation following the halving. Moreover, the charts suggest a multi-month uptrend towards new all-time highs by the end of 2024.
Because altcoin sentiment is closely tied to Bitcoin prices, finding a local bottom does not necessarily lead to an altcoin rally, writes Onufriychuk of Qubic Labs.
“Even if altcoins find a bottom around June, it doesn’t necessarily mean a bull market will begin. A significant transformation will require more fundamental changes, such as increased retail and institutional investment and favorable regulatory developments, given the lack of new liquidity and heavy reliance on institutional reinvestment in new projects.”
On the monthly chart, 10 of the 12 moving averages (MAs) are sending buy signals for top altcoins like struggling Ethereum (ETH). Moving average indicators are commonly used in technical analysis to determine the average price of an underlying asset over a period of time.
Altcoin prices could rise due to M2 money supply turning positive year-on-year for the first time since November 2023, meaning investors may soon start looking for hedges against inflation or alternative investments.
The M2 money supply estimates all cash and short-term bank deposits across the United States.
As the money supply of the world’s largest economy increases, some of the new supply may flow into altcoins and memecoins, contributing to the start of “altszn”.
Related: Analysts Say Bitcoin Distribution ‘Red Zone’ Is Over
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.