In a post on X, one analyst observes that the altcoin market capitalization has broken from the Wyckoff accumulation phase. With this upswing, the trader expects altcoin prices to move higher.
This refreshing breakout coincides with Bitcoin’s (BTC) stellar performance when writing on February 28. At spot rates, the coin is trading above $60,000, a psychological round number- now supported- and is closely approaching $70,000.
The Altcoin Breakout From Accumulation
The “Wyckoff accumulation pattern” is a concept developed by technical analysts to pick out potential buying opportunities, in this case, altcoins. Whenever prices are in this phase, it is widely believed that the so-called “smart money” or large institutional players are accumulating at low prices.
Currently, prices consolidate at tight ranges and with low trading volumes. A signal marking the end of this accumulation is a sharp breakout, lifting prices above the defined range. Often, this upswing is with rising trading volume.
Looking at the chart, the altcoin market cap has broken above the accumulation phase. With previous resistance and support, the altcoin market cap will likely continue floating higher. As such, top altcoins, including Ethereum (ETH), Solana (SOL), and XRP, will follow suit, posting fresh 2024 highs.
Why Spot Bitcoin ETFs Give BTC Edge In This Bull Run
So far, Bitcoin is leading the way, posting over $10,000 in less than a week. However, with the coin trading above $60,000, its demand-side drivers differ entirely from what’s influencing altcoins. The approval of spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC) has seen billions of dollars flow to the world’s first cryptocurrency.
Therefore, while altcoins have historically outperformed BTC when crypto prices rally, there is an edge with spot Bitcoin ETFs. As such, this bull run will likely differ from 2017 and 2021. This forecast is because institutions will likely favor a regulated asset over altcoins whose status remains undefined.
As of late February 2024, the United States SEC has not approved spot ETFs of any altcoin, including that of Ethereum. Additionally, the agency has labeled several top altcoins, including Cardano (ADA), unregistered securities. The agency even filed lawsuits against major exchanges like Binance and Coinbase, accusing them of facilitating the trading of what the commission described as “unregistered securities.”
It is not immediately clear whether the United States SEC will change their preview of leading altcoins, especially Ethereum (ETH), which has a market of over $400 billion. Wall Street heavyweights like BlackRock and Fidelity remain interested in launching spot Ethereum ETFs.
Feature image from DALLE, chart from TradingView
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