🌎 Bitcoin’s Bullish Pattern Signals Potential Altcoin Season

Crypto traders are closely watching for the next altcoin season as Bitcoin forms a promising pattern on the weekly chart.

Bitcoin’s Bullish Pattern

Bitcoin, the largest cryptocurrency by market cap, has developed a cup and handle chart pattern. This pattern features a rounded bottom forming the cup and a consolidation or pullback to form the handle. The upper part of this pattern was at $68,837, with the handle forming since March this year.

In the handle section, Bitcoin has also formed a falling broadening wedge pattern and found strong support at the 50-week moving average, preventing a drop below this level in July.

Bitcoin Price Analysis

This cup and handle pattern is similar to what was observed in gold. On the monthly chart, gold formed the cup section between September 2011 and July 2020, followed by the handle, leading to a bullish breakout to a record high of $2,485 this month.

Bitcoin and gold share some similarities. Larry Fink, the CEO of Blackrock, recently referred to Bitcoin as digital gold, citing rising geopolitical issues and increasing US public debt as factors that could benefit Bitcoin.

Strong Fundamentals

Bitcoin’s fundamentals are robust. Institutional demand is increasing, with investors buying through ETFs. Additionally, the Federal Reserve is expected to cut interest rates soon, possibly starting in September. Bitcoin’s supply has also been constrained by April’s halving event.

Institutional Interest and Market Sentiment

Fed rate cuts are generally positive for Bitcoin and other altcoins as they create a risk-on sentiment among investors. This scenario could see some of the $6 trillion currently in money market funds shift towards riskier assets like stocks and cryptocurrencies.

Analysts remain optimistic about Bitcoin. Michael Saylor, a significant Bitcoin investor, predicts the coin could rise to $13 million in his base case and $49 million in his most optimistic scenario. Ki Young Ju, the founder of CryptoQuant, noted that the bull cycle might continue until 2025.

Old whales take profits during bull markets. Their selling brings new capital into accumulation addresses, raising realized prices.

Impact on Altcoin Season

A strong Bitcoin bullish breakout is likely to trigger another altcoin season. Historically, altcoins, including meme coins, perform well when Bitcoin rises.

For instance, altcoins like Solana reached a multi-year high of $210 in March when Bitcoin hit its record high. Similarly, Cardano (ADA) surged to $0.81, and Polygon jumped to $1.2887.

Meme Coins Performance

Recent trends show that meme coins outperform their larger peers during altcoin seasons. Meme coins like Pepe, Dogwifhat (WIF), and Popcat have seen better performance compared to bigger coins this year.

Many traders favor meme coins due to their lower prices relative to Bitcoin. For example, it’s cheaper to buy a token like Book of Meme (BOME), trading at $0.011, compared to Bitcoin at $66,000. Meme coins are also highly volatile and have significant trading volumes.