Altcoin market shows same signals as bottom of 2022, says analyst

The total altcoin market capitalisation, excluding Bitcoin and Ethereum, is currently showing patterns strongly resembling those from the bear market bottom of 2022. This is according to analyst Michaël van de Poppe, who points to a notable technical setup on the weekly chart. In his view, this is an attractive moment to build positions for the next bull run.

Bullish divergence on both MACD and RSI

On the weekly chart, Van de Poppe sees a massive bullish divergence emerging, and on two different indicators simultaneously. Both the MACD and the RSI are giving this signal, adding weight to the analysis. A bullish divergence means that the price is making new lows while the indicators are forming higher lows, a classic sign that selling pressure is decreasing.

The chart shows that after a breakdown below the $1.2 trillion level, the altcoin market capitalisation falls sharply to a zone around $600 to $700 billion. Precisely in that area is a higher timeframe support zone, marked on the chart as the ‘dip buying’ zone. The market capitalisation stands at approximately $667 billion at the time of writing.

Chance of new lows decreases

Van de Poppe states that the situation is now very similar to the bear market bottom of 2022, when similar divergence signals also preceded a strong recovery move. He indicates that the chance of new lows has now decreased significantly, although he does not rule it out completely.

For investors interested in altcoins, he sees the current zone as an ideal accumulation moment. In his view, the combination of a higher timeframe support and a double divergence on the weekly chart makes this a technically well-supported entry opportunity. Whether the market has indeed left the bottom behind will have to become clear in the coming weeks.