Are Altcoins on the Verge of a Major Rally? Three Factors to Consider
Three key factors contributing to the potential rally were highlighted by a market analyst. In particular, the USDT Treasury has issued USDT 1 billion during this crucial period, suggesting a ripe opportunity for market growth.
The cryptocurrency market in general has experienced a recent downturn, registering a 2.87% decline in the last 24 hours, reducing its total capitalization to $2.04 trillion. This downturn has hit altcoins the hardest.
Analysts remained optimistic about the altcoin market’s rapid recovery in the near future, despite the increasing selling pressure and a slight increase in bitcoin’s [BTC] market dominance (up 0.28% over the same period).
Possible Altcoin Rally?
Based on several key technical alignments, cryptocurrency analyst Moustache has predicted an imminent rally in the altcoin market. Several factors that traditionally herald significant price movements are converging, according to his analysis.
The most important indicator is the appearance of an inverted head and shoulders pattern within a descending channel. A strong breakout often precedes this pattern, which is characterized by price fluctuations between two diagonal lines (known as resistance and support).
Such a breakout usually drives prices to the upper boundary of the channel or beyond, which is an indication of a bullish reversal. A golden cross on the moving average convergence divergence (MACD), shown in the yellow circle, reinforces the bullish outlook.
This occurs when the blue MACD line crosses decisively above the orange signal line, a phenomenon that has been observed within a descending triangle over the past three months of trading.
Historically, this crossover strongly indicates upward momentum. Taken together, these technical confluences (the head and shoulders pattern, the MACD crossover, and the channel dynamics) increase the likelihood of a significant upward move.
The final confirmation of an uptrend will be marked by a breakout of both the descending channel and the MACD. This will push the price into an uptrend zone.
Increased Liquidity Inflows Add Optimism to the Market
Reflecting growing investor interest, the cryptocurrency market is experiencing increased liquidity as more stable coins enter circulation.
A major recent development was the minting of USDT 1 billion by Tether Treasury. This move typically signals increased demand for stable coins.
Investors often use these funds to purchase bitcoin and other altcoins, a sign of a bullish market outlook. Additionally, Lookonchain reported that at least $50 million (the second largest stablecoin by market cap) was injected into the market recently, further increasing liquidity.
According to AMBCrypto, XRP and AAVE are positioned to benefit significantly from this development, especially if the expected breakdown of the existing confluence patterns occurs.
XRP Predicts Major Recovery Amid Market Resilience
Despite ongoing legal challenges with the US Securities and Exchange Commission, XRP has maintained its position among the top 10 tokens by market cap, growing 14.02% over the past year.
Going forward, a major shift in the altcoin market could push XRP to new heights, with key liquidity zones of $0.74 and $0.9366 in sight. If it continues to gain momentum, XRP may reach the $ 1 level, which was last seen in December 2021.
AAVE on Course for Growth with Strong Performance at DeFi
Positioning itself as a strong contender in the upcoming Altseason, AAVE showed remarkable growth last month.
Although CoinMarketCap recorded a monthly gain of 24.01%, it saw a significant increase of 110.12% between August 5th and September 9th.
AAVE ranks sixth in market capitalization as one of the leading decentralized financial protocols. With the market poised to move, AAVE could potentially trade as high as $243.00, a level last seen in April 2022.
By Audy Castaneda