Altcoins such as Ethereum, Cardano, Solana, etc. may have lower spot prices. But they are preparing for a potential surge, according to one analyst who sees the current formation as similar to the 2020 market cycle.
The analyst said in Called Often, after a period of accumulation and retesting of previous highs, altcoins tend to become more volatile. The cryptocurrency analyst also pointed out that Bitcoin has pulled back from its all-time highs and is preparing for a possible retest of these levels registered in March.
Although altcoins have declined, looking at their price action over the past 24 hours, they are showing signs of strength similar to the last cycle registered in 2020. The analyst said Bitcoin will fuel altcoin volatility to new levels and valuations.
Will altcoins repeat the 2020 cycle?
It is currently difficult to predict the exact value of the top altcoins. However, analysts point to a similar formation in the current price action.
When altcoins consolidate after a surge, their prices tend to recover strongly. This surge became especially evident after Bitcoin broke a critical liquidation level and entered “price discovery,” or a new all-time high.
Bitcoin is currently in this position. The coin is trading lower and cooling off from its all-time highs. Even after pushing higher last week’s highs, the bulls failed to breach the $71,700 level on the daily chart. As BTC collapsed, altcoins also fell as Ethereum, Solana, and their parent coins fell below support levels.
Will Ethereum and other altcoins rebound strongly?
Altcoin season may come earlier, especially if Bitcoin recovers. Possible triggers include the upcoming Bitcoin halving event. Analysts argue that the halving is likely to cause a supply crisis, creating scarcity. If institutions bring in the same level of demand, BTC is likely to surge higher, hitting all-time highs of $71,700 and even $73,800.
In addition to this, demand may be driven by Ethereum’s upcoming network upgrades, such as the recently mentioned “Purge” and Solana’s Firedancer integration. Developers are working on Voltaire on Cardano. All these changes are planned to make the leading smart contract platform more stable and improve its performance.
In addition to the network upgrade, analysts are considering the possible approval of a spot Ethereum exchange-traded fund (ETF). If the U.S. Securities and Exchange Commission (SEC) approves this product, ETH could benefit from the release of other products. The drafting of conforming laws may also be accelerated, especially now that BlackRock believes tokenization and real-world assets (RWAs) are the future of finance.
Featured image from Shutterstock, chart from TradingView
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