Key Points
- The total crypto market cap has bounced back to $3.16 trillion after dropping to $2.81 trillion.
- Despite overall bearish sentiment, there are signs of a potential bullish reversal in the altcoin market.
The total crypto market cap experienced a 7.58% decline last week, falling from $3.45 trillion to a closing price of $3.19 trillion.
Currently, the market cap stands at $3.16 trillion, demonstrating a significant recovery after initially dropping to $2.81 trillion at the beginning of the week.
Crypto Market’s Potential Reversal
Despite a generally bearish sentiment in the crypto market, there are glimmers of hope for a bullish reversal, possibly signaling an all-time altcoin season.
However, mirroring the broader market, the total market cap of cryptocurrencies, excluding Bitcoin (BTC) and Ethereum (ETH), is struggling at $883 billion.
The question now is whether altcoins can regain bullish momentum as the crypto market and Bitcoin strive for a bounce-back rally.
Bitcoin and Ethereum’s Divergent Trends
Currently, Bitcoin and Ethereum are exhibiting divergent and opposing trends.
Over recent months, Bitcoin has nearly reached the $100,000 mark six times.
However, each time Bitcoin approaches the $100,000 mark, Ethereum records a lower high.
When Bitcoin first reached the $100,000 milestone, Ethereum was valued at $4,000.
With each subsequent peak of Bitcoin nearing $100,000, Ethereum’s value has consistently decreased.
This divergence in Bitcoin and Ethereum prices could potentially indicate a weakness among Bitcoin and altcoins.
On a weekly timeframe, the ETH/BTC chart reveals growing weakness in Ethereum against Bitcoin.
This has led to a drop from 0.03567 BTC to 0.03222 BTC, with the ETH/BTC pair currently standing at 0.02748 BTC as it tests the 78.60% Fibonacci level.
Despite this, ETH remains a crucial support level, and the oversold RSI could also hint at a potential reversal.
Positive Outlook for Altcoin Season
Beyond the divergence between Bitcoin and Ethereum, crypto analyst Ted Pillows holds a bullish outlook on the upcoming altcoin season.
In a recent post, Pillows highlighted frequent double-bottom reversals in the altcoin market.
According to his monthly timeframe analysis, the crypto total market cap, excluding Bitcoin, has experienced three double-bottom reversals since 2015.
Furthermore, the current double-bottom reversal exhibits a canonical similarity with the 2017 and 2021 bull markets.
Based on the RSI indicator, the altcoin season begins after a small reaccumulation phase.
Currently, the RSI line has surpassed the reaccumulation part, suggesting a potential bull market in the altcoin segment.
As the overall crypto market shows signs of recovery, the divergence between Bitcoin and Ethereum underscores underlying market weaknesses.
Nevertheless, a bullish analysis from Ted Pillows suggests that altcoins could regain momentum, potentially ushering in a new altcoin season if key support levels hold.
