- Falling wedge and inverse head and shoulders signal potential altcoin market reversal.
- Long-term trendline support holds altcoins trade at 60-80% of previous highs.
- September breakout likely as altcoin market approaches critical support levels.
The altcoin market could be on the cusp of a bullish reversal, with technical indicators suggesting a potential breakout. Following a prolonged nine-month downtrend, a falling wedge pattern has formed, potentially signaling a shift in market sentiment.
This pattern, followed by an inverse head and shoulders formation, could signal the start of a new upward trend.
Technical Patterns Hint at Reversal
The current technical analysis, which was noted by @el_crypto_prof, reveals a falling wedge pattern, often seen as a bullish reversal signal. This pattern is characterized by two converging trendlines that capture the price’s downward movement.
Within this wedge, an inverse head and shoulders formation has also developed, adding further weight to the potential for a market reversal. If the market successfully breaks above the neckline of this pattern, it could mark the beginning of a sustained upward trend, reversing the bearish sentiment that has dominated in recent months.
Long-Term Trendline Support Holds Significance
Crypto analyst Mags had also emphasized the importance of long-term trendline support in the altcoin market. On his X account, Mags highlighted that altcoins are currently trading at 60-80% of their previous highs, while the Total2 index, which tracks the market cap of altcoins excluding Bitcoin, is testing a crucial long-term support level.
This trendline has historically acted as a solid foundation for price rebounds, and if it holds, it could pave the way for a new altcoin season.
September Breakout on the Horizon?
Adding to the optimism, Coin Edition recently reported that the altcoin market is poised for a breakout in September. The report points to a “higher low” formation, which typically indicates a trend reversal.
Although the market remains under pressure on shorter timeframes, with lower highs reflecting cautious trader behavior, the broader market trend suggests a period of consolidation that could lead to a significant breakout.
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