- Altcoin cap tests $1.77T resistance; breakout could lead to parabolic run toward $7.66T, similar to 2020–2021 cycle.
- Bitcoin dominance dips to 60.4%, a level often preceding altcoin rallies; Ethereum’s surge past $4K adds momentum.
- ECB rate cuts and possible Fed easing align with technical breakout setup, boosting risk-on sentiment for altcoins.
The altcoin market is approaching a technical point that analysts compare to the 2020–2021 breakout phase. According to Merlijn The Trader, historical conditions that once propelled altcoins to record highs are forming again.
The current market outlook shows prices pressing against the $1.77 trillion resistance zone. This level previously capped gains in late 2021 after a rapid rally from $470 billion. Analysts now point to a potential expansion toward $7.66 trillion if this level is surpassed. The projection aligns with the long term trendline dating back to 2018.
Long Term Setup Resembles Previous Parabolic Cycle
Between 2018 and early 2021, altcoin market cap moved in a prolonged consolidation below $470 billion. Late 2020 was a decisive breakout, confirmed by multiple retests, which accelerated the climb toward the $1.77 trillion peak by that year’s end. The subsequent correction lasted through mid-2023, finding a base near $850 billion.
This support area has since held firm, creating the foundation for the current advance. The market now approaches the $1.77 trillion zone for the second major time. Historical comparison suggests that clearing this barrier could open the path for rapid valuation gains in the altcoin sector.
Bitcoin Dominance Change Adds to Market Pressure
Ted Pillows noted another development shaping market sentiment. Bitcoin dominance recently slipped to 60.4%, below the 60.5% level that has historically preceded broader altcoin gains. Ethereum’s move past $4,000, supported by strong trading volume and ETF inflows, is one example of this shift.
The Altcoin Season Index currently stands at 43, a reading that suggests possible sector rotation in the coming months. Pillows also noted that the European Central Bank’s recent interest rate cut has added demand for riskier assets, including cryptocurrencies.
Macro and Technical Factors Align for Potential Breakout
The market’s current position reflects a combination of macroeconomic and technical drivers. A decisive monthly close above $1.77 trillion could mark the start of a major expansion phase. According to Merlijn The Trader, this breakout zone is the final resistance before the projected $7.66 trillion target.
Meanwhile, the market watch is on U.S. Federal Reserve’s September meeting, as a potential rate cut could add momentum. Pillows indicated he is closely watching Bitcoin dominance trends for further confirmation before increasing altcoin exposure.
