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The past 24 hours have seen Bitcoin still consolidating with intermittent attempts to push higher above $105,000. Ethereum is also consolidating around $2,500, while altcoins such as Solana and Dogecoin have also yet to show signs of early upside momentum. However, a recent post by a crypto analyst on the social media platform X suggests that altcoin investors are currently on the verge of making more money than they know how to handle because of the cyclical behavior of the crypto market.
$TOTAL3ESBTC Chart Cyclical Deviation Similar To 2018 And 2021
The analyst, known as Prometheus on X, based their prediction of an altcoin rally on the $TOTAL3ESBTC chart, which measures the ratio of the total altcoin market cap to Bitcoin, excluding stablecoins. As shown in the chart shared by the analyst, each of the previous market cycles was characterized by a clear deviation below cyclical range lows, which occurred just as Bitcoin entered a new phase of price discovery.
These deviations coincided with periods when Bitcoin was absorbing liquidity from the rest of the market and outperforming the rest of the market. These are marked by the shaded purple regions in the chart below. However, what followed was an aggressive rebound called “money printer’ in the alt market, with capital rotation pushing the price of altcoins higher very rapidly.
Source: Prometheus on XIn this current cycle, the chart now shows another such deviation playing out. The analyst noted that Bitcoin dominance is still expanding and BTC continues to push higher; this deviation below the cyclical range low is repeating itself once again. As such, the outlook is for Bitcoin to keep absorbing liquidity for now, but the “money printer” phase marked in green is approaching. History suggests that the stage is being set for another altcoin-led breakout, assuming BTC soon cools off.
Altcoin Rally To Follow Bitcoin Cool-Off
A key detail in the analyst’s post warns against mistiming the altcoin move. Many traders often associate Bitcoin’s rally with a strong move for other cryptocurrencies, but as shown in this cycle, this isn’t always the trigger for altseason. In fact, as explained by the analyst, the green light for altcoin rallies typically comes not when Bitcoin is in full price discovery mode, but when it pauses or retraces slightly after a strong leg up. This momentary cool-off allows liquidity to shift from Bitcoin into altcoins, which causes explosive but short-lived rallies.
“Everyone positioned in altcoins are about to make more money than they know what to do with,” the analyst noted, but also added that only a small percentage of those traders will actually exit in profit.
At the time of writing, Bitcoin is trading at $104,730. Its market dominance is currently at 64.0%, which is an increase of 1.18% in the past 24 hours.
Featured image from Adobe Stock, chart from Tradingview.com
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