Crypto analysts speculate that the massive weekend leverage flushout, which wiped billions of dollars from the crypto markets, may have just paved the path for “altseason 3.0”
“Every major expansion in crypto has included sharp 30% to 60% resets along the way,” observed analyst and researcher ‘Bull Theory’ on Monday.
March 2020 saw almost 70% wiped off markets in the pandemic-induced black swan event, and May 2021 saw more than 50% wiped out. There were at least five other 30% to 40% altcoin slumps during the last bull market cycle.
The market crash in April this year had many calling it the beginning of the bear market. Yet “each of those wipes looked like the end [and] each was followed by the strongest rallies of the cycle,” the analyst added.
The previous bull market had multiple altcoin market flushes. Source: Bull Theory
Altcoins will bounce back
Altcoins are usually hit hardest during these epic market resets, and this was the case over the weekend with XRP (XRP) dumping at least 18%, Solana (SOL) 22%, Dogecoin (DOGE) 28%, Cardano (ADA) 25%, and Chainlink (LINK) 26% in just a day.
After the March 2020 flash crash, “we had a huge altseason where altcoins pumped 25x to 100x,” said analyst Ash Crypto before adding, “I think it will happen again.”
Meanwhile, analyst ‘Merlijn The Trader’ identified a setup for “altseason 3.0” with a monthly bullish MACD cross on the BTC/altcoins chart, the same pattern that occurred in 2017 and 2021.
Chart patterns are looking similar to those of previous cycles. Source: Merlijn The Trader
Total crypto cap falls back below $4T
The total crypto market capitalization dipped back below the psychological $4 trillion mark on Tuesday, despite the bullish sentiment regarding the recovery and a potential altseason.
Bitcoin (BTC) is leading losses with a 1.4% decline on the day as it fell below $113,500 on Tuesday morning. This comes at the same time as several altcoins were posting daily gains.
Additionally, Bitcoin dominance, another key indicator of altcoin performance, is forming its first red weekly candle in five weeks as it fell below 59% on Tuesday, according to TradingView.
