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altcoin crypto bitcoin
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Altcoin Market Forms Crypto’s Most Dangerous Pattern

Tony Spilotro by Tony Spilotro
2 years ago
in Bitcoin, Cryptocurrency news
Reading Time: 3 mins read
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After two full years of a bear market and a recent breakout across the altcoin market, crypto analysts are convinced that an alt season is just around the corner.

However, the altcoin market is forming the most dangerous pattern in the crypto space – and one that in the past has caused the market to collapse to new lows.

Altcoin Market Forms Descending Triangle

Many altcoins have exploded in the new year, going on insane rallies that resulted in more than 100% ROI in many cases.

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Altcoins strongly outperforming Bitcoin, has prompted some of the crypto industry’s top analysts to conclude an alt season is near – an extended period of time where the alternative crypto assets beat Bitcoin in returns by a wide margin.

Related Reading | Past Crypto Cycle Highlights Altcoin Underperformance, But Perfect Storm is Coming

And while there’s no denying that altcoins have been looking exceptionally bullish, even showing the strongest surge in trading volume in the market’s entire history, the altcoin market has formed the cryptocurrency space’s most dangerous and accurate chart pattern: the descending triangle.

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On weekly timeframes, a massive, two-year-long descending triangle is clearly visible. Descending triangles can be bullish, but favor a break to the downside.

altcoin descending triangle crypto

Such a massive descending triangle breaking down, would have devastating implications for the altcoin space and greater crypto market.

Targets are measured by taking the widest point of the triangle and applying it to the breakout point.

In the Altcoin/BTC chart below, such a target would wipe out nearly half a decade worth of progress and growth from the altcoin market. Because the chart weighs altcoins against Bitcoin, this would suggest that most of the lost capital from altcoins would pour directly into the leading cryptocurrency by market cap.

altcoin descending triangle crypto

Further adding credence to a potential drop, the Gann Double Band indicator has just issued the first-ever short signal in the altcoin/BTC chart’s history on weekly timeframes.

Past Bitcoin Breakdowns Provide Example of Potential Danger

To demonstrate the severity of these patterns and signals, Bitcoin has in the last two years formed two major descending triangles, with each breaking down to new lows.

Related Reading | Is the Coronavirus The Black Swan Event That Crushes Cryptocurrency?

In the chart below, each triangle resulted in a dangerous drop of the crypto to new lows, providing an example of what to expect for a drop in altcoins if the pattern plays out.

altcoin descending triangle crypto bitcoin

The same Gann Double Band signal on monthly Bitcoin charts, has issued two short signals during the bear market, with each occurring at a peak that touched the top trendline of the descending triangle formation.

As for why altcoins could be in danger, aside from the formation and signals themselves, the speculative assets are among the riskiest assets and investments by miles. And with the market in turmoil, and coronavirus fears causing investors to panic, risky assets like alts could be the first to get dumped in a massive panic-induced selloff.

This pattern could be foretelling such an ominous event, so plan accordingly.

Tags: alt/btcaltcoinsbitcoincryptodescending triangle
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter at @tonyspilotroBTC and feel free to drop me a line if you would like to work together.

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