Altcoin Season Hopes Rise as Bitcoin Price Forms Bullish Trend

Cryptocurrency traders are preparing for the upcoming altcoin season as Bitcoin forms an extremely bullish pattern on the weekly chart.

Bitcoin (Bitcoin), the largest cryptocurrency by market cap, has formed a cup and handle chart pattern. This pattern is characterized by a rounded bottom forming the cup and either a consolidation or a pullback to form the handle. The top of this pattern was located at $68,837, while the handle section has been forming since March of this year.

It is important to note that it formed a fall expanded corner model in its handle section. It also found a strong support level at the 50-week moving average, where it failed to break below in July.

Bitcoin Price | Chart by TradingView

Gold is a good example of the cup and handle pattern in action. On the monthly chart, it formed the cup section between September 2011 and July 2020. It then formed the handle section and broke higher to reach a record high of $2,485 this month.

Bitcoin and gold have some relationship. In a recent statementLarry Fink, founder and CEO of Blackrock, said he sees Bitcoin as a digital gold that will do well amid growing geopolitical issues and soaring U.S. government debt.

Gold Price | Chart by TradingView

Additionally, Bitcoin has strong fundamentals. Demand is increasing as institutional investors buy through ETFs, while the Federal Reserve is expected to start cutting interest rates as early as September. Supply has been hampered by the April halving.

Fed rate cuts are positive for Bitcoin and other altcoins because they spark risk-on sentiment among investors. In this case, some of the $6 trillion invested in money market funds will likely shift to riskier assets like stocks and cryptocurrencies.

Analysts are also bullish on Bitcoin. Michael Saylor, Bitcoin’s biggest buyer, expects the cryptocurrency to reach $13 million in his base case and $49 million in his most optimistic scenario. In a recent note, Ki Young Ju, the founder of CryptoQuant, noted that the bull cycle could continue until 2025.

Bitcoin to Trigger New Altcoin Season

A strong bullish breakout in Bitcoin will likely trigger a new altcoin season. Historically, altcoins, including meme coins, do well when Bitcoin is up.

For example, an altcoin like Solana (GROUND) hit a multi-year high of $210 in March, when Bitcoin hit its all-time high. Similarly, Cardano (ADA) reached $0.81 while Polygon (MATICS) jumped to $1.2887.

Recent performance shows that meme coins outperform their larger counterparts when there is an altcoin season. Meme coins like Pepe (PEPE), Dogwifhat (WIF) and Popcat have outperformed the biggest coins this year.

Many traders like these meme coins because of their low prices compared to Bitcoin. In this case, it is still cheaper to buy a token like Book of Meme (BOME) which was trading at $0.011 instead of Bitcoin which is trading at $66,000. Meme coins are also very volatile and have a lot of volume.

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