Altcoins such as Ethereum, Cardano, and Solana can be lower on spot rates. But they are bracing for a potential surge, according to one analyst who sees the current formation as similar to the 2020 market cycle.
In a post about X, the analyst said To tell Often after a period of accumulation and retesting previous highs, altcoins tend to become unstable. The crypto analyst also noted that Bitcoin has retreated from all-time highs and is bracing for a possible retest of this level recorded in March.
Although altcoins have fallen sharply, looking at the price trends over the past 24 hours, they are on a bullish path, similar to the last cycle registered in 2020. Analysts say Bitcoin will drive altcoins to new levels and valuations.
Will altcoins repeat the 2020 cycle?
At the moment, it is difficult to predict the exact valuations of top altcoins. However, analysts point out that a similar formation can be seen in the current price trend.
When an altcoin spikes and then consolidates, the price has tended to recover strongly. This surge was especially noticeable after Bitcoin broke through a key liquidation level and entered “price discovery,” or a new all-time high.
Bitcoin is currently in this position. The coin is trading at a low price and has cooled off from its all-time high. Even after hitting a new high last week, the bulls failed to break out of the $71,700 level on the daily chart. As BTC plummeted, altcoins also fell, with Ethereum, Solana, and Topcoin falling below support levels.
Will Ethereum and other altcoins rebound strongly?
This time, especially if Bitcoin recovers, the altcoin season could come early. Possible triggers include the upcoming Bitcoin halving event. Analysts say the halving is likely to create a supply crisis and cause shortages. If financial institutions converge on the same demand level, BTC could rise further and hit new all-time highs of $71,700 and even $73,800.
Beyond this, upcoming network upgrades in Ethereum, such as the recently mentioned “Purge” and the Firedancer integration in Solana, are likely to drive demand. Developers are working towards Cardano's Voltaire. All these changes are planned to improve the reliability and performance of the top smart contract platforms.
In addition to network upgrades, analysts are considering the possible approval of a Spot Ethereum exchange-traded fund (ETF). If the U.S. Securities and Exchange Commission (SEC) approves this product, ETH could benefit from lifting other products. It could also accelerate the drafting of appropriate legislation, especially now that BlackRock believes tokenization and real-world assets (RWA) are the future of finance.
Featured images from Shutterstock, charts from TradingView
