The founders of the analytics platform Glassnode are predicting the altcoin market cap will surge by 350% after the recent correction.
Glassnode co-founders Jan Happel and Yann Allemann, who share the Negentropic handle on the social media platform X, say the alt market cap may be forming a similar 2021 structure when there was a sudden retracement followed by a massive bull run.
The analysts use the Elliott Wave theory in their analysis, which states that an asset tends to witness a five-wave rally.
“The crypto bull market continues. ‘Others’ follow crypto excluding the largest ten cryptos. Observe that we in early 2021 had a strong correction. We believe that was a wave four. We now have a similar strong decline. More upside is coming. This index and our Fibonacci levels give us [reason to believe] we may see ~350% upside from current levels.”
The founders recently said another bullish catalyst for the crypto market is the waning strength of the US dollar index (DYX).
According to the analysts, the DXY likely printed a top earlier this month in an expanding diagonal pattern, implying that a significant downward move is underway, which may be a catalyst for a renewed bull market for Bitcoin (BTC).
The founders also weigh in on what they believe are the price impacts from the spot BTC exchange-traded funds (ETFs). They say that ETF investors are reactionary to price declines, but not a cause of them.
“The significant volume handled by ETFs also highlights their potential as catalysts in the market, potentially driving both short-term price movements and long-term strategic shifts in investment and trading behaviors. So far, however, significant ETF outflows often align with notable price drops in the Bitcoin market, indicating that investors tend to react to existing downturns rather than causing them.
This suggests a predominantly reactive investor behavior in times of market volatility, which is crucial for understanding the causality of price movements.”
Bitcoin is trading for $66,434 at time of writing, down slightly in the last 24 hours.
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