Altcoin Market Cap Nears $250 Billion, Signaling Potential Rally

The cryptocurrency market is in the process of recovering from a significant crash that occurred in early March, with sentiment currently fluctuating. Despite the Fear & Greed Index remaining in the fear zone, the Bitcoin price is gradually pushing back towards $90,000, which is slowly altering the sentiment among altcoins.

Rekt Capital, a prominent analyst on X, has reignited hopes for an incoming altcoin season by identifying a key technical signal. According to the analyst, a breakout in the altcoin market cap could be imminent if a critical condition is met. The analyst shared a chart and commentary suggesting that the next major rally may already be underway, provided that the altcoin market cap can secure a weekly close above a specific level.

The altcoin market cap reached a multi-month low in the first week of March following the crash, which saw many cryptocurrencies lose weeks of price gains within a short period. This crash briefly pushed the altcoin market cap below $200 billion, although it eventually closed the week above this threshold. However, the market cap has been steadily increasing over the past two weeks since the crash.

At the time of writing, the altcoin market cap has risen back to around $249 billion. Technical analysis from crypto analyst Rekt Capital emphasized that a weekly close above the $250 billion mark would mark a significant technical shift for altcoins. This level, highlighted in blue on the chart, will be an important resistance level for crypto investors waiting for the altcoin season. The analyst noted that a decisive close above it would likely precede a breakout rally toward the $315 billion level, marked in red. That move wouldn’t just signal short-term bullishness; it would also serve as confirmation that the bottom for altcoins has already been established.

However, even if the altcoin market cap were to surge quickly towards $315 billion, there would still be some work to do to return to the recent high of $451 billion set in December 2024.

The nature of the current correction from the $451 billion altcoin market cap adds more weight to the possibility of an altcoin rally. According to the analyst, the ongoing correction has only reached a 55% drawdown from its local high, notably shallower than the previous major altcoin bear market retracements of 69% and 85%. The shallower decline in the current retracement is interpreted as a sign of growing market maturity among altcoins. This implies that the selling pressure may be waning and that bulls are preparing for a stronger push. It also means that the $425 billion altcoin market cap resistance is weakening as a point of rejection, which in turn increases the chances of a breakout at the next visit.