Bullish Pattern on Bitcoin Price Boosts Hopes for Altcoin Season
Crypto traders are preparing for the upcoming altcoin season as Bitcoin forms a highly bullish pattern on the weekly chart.
Bitcoin (BTC), the largest cryptocurrency by market cap, has formed a cup and handle chart pattern. This pattern features a rounded bottom forming the cup and either a consolidation or a pullback to form the handle. The upper part of the pattern reached $68,837, and the handle section has been forming since March of this year.
Significantly, Bitcoin has also formed a falling broadening wedge pattern in its handle section. It has found strong support at the 50-week moving average, failing to drop below it in July.
An excellent example of the cup and handle pattern can be seen in gold. On the monthly chart, gold formed the cup section between September 2011 and July 2020. It then formed the handle section and experienced a bullish breakout, reaching a record high of $2,485 this month.
There is a relationship between Bitcoin and gold. Larry Fink, the founder and CEO of Blackrock, recently stated that he sees Bitcoin as a digital gold that will perform well due to rising geopolitical issues and the surging US public debt.
Furthermore, Bitcoin has solid fundamentals. Demand is increasing as institutional investors purchase through ETFs, and the Federal Reserve is expected to begin cutting interest rates as early as September. Supply has been limited by the halving event in April.
Fed rate cuts have a positive impact on Bitcoin and other altcoins because they create a risk-on sentiment among investors. In this scenario, some of the $6 trillion invested in money market funds is likely to shift to riskier assets such as stocks and cryptocurrencies.
Analysts are also optimistic about Bitcoin. Michael Saylor, the largest Bitcoin buyer, predicts that the coin will rise to $13 million in his base case and up to $49 million in his most optimistic case. In a recent note, Ki Young Ju, the founder of CryptoQuant, mentioned that the bull cycle could continue into 2025.
A significant breakout in Bitcoin’s bullish trend is likely to ignite another altcoin season. Historically, altcoins, including meme coins, perform well when Bitcoin is on the rise.
For instance, altcoins like Solana (SOL) reached a multi-year high of $210 in March when Bitcoin hit its record high. Similarly, Cardano (ADA) reached $0.81, while Polygon (MATIC) surged to $1.2887.
Recent performance has shown that meme coins outperform larger cryptocurrencies during altcoin seasons. Meme coins like Pepe (PEPE), Dogwifhat (WIF), and Popcat have performed better than major coins this year.
Many traders are attracted to these meme coins because of their low prices compared to Bitcoin. In this case, it is more affordable to buy a token like Book of Meme (BOME), which was trading at $0.011, rather than Bitcoin, which trades at $66,000. Meme coins are also highly volatile and have significant trading volume.
