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US China trade deal temporarily boosts crypto market’s confidence.
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Bitcoin is leading the rally, altcoins are now entering breakout phase.
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Gold’s weakness is causing investors to shift their attention to altcoins.
The US and China agreed to a temporary deal that will reduce tariffs on goods from each other for 90 days. This has given a boost for crypto markets. Bitcoin rose over 10% to $106k before a slight reversal.
It appears that altcoins have finally woken up, now that Bitcoin is leading the way, with its strong upward movement. Ethereum (ETH) has also jumped back above $2,500. Altcoins face a similar challenge, just as Bitcoin did when it came to overcoming resistance levels.
According to an analyst, the market moves in phases. Bitcoin is currently entering its third phase where it is aiming for new highs. Altcoins, on the other hand, are in their second phase and preparing themselves for a big run. Altcoins typically take off once Bitcoin reaches its maximum and cools down a bit.
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Weakening gold could signal altcoin market upside
Michael Van De Poppe, an analyst, says that Gold is showing signs of weakness by forming lower highs. This usually signals a downward trend or a period where Gold is consolidating.
Gold’s cooling could lead to more gains in the altcoin markets. In the short-term, as Gold’s value declines, traders and investors may shift their attention to altcoins, which are high-growth, riskier assets.
Understanding the phases of altcoin rallies
Analyst VirtualBacon revealed that Bitcoin, Ethereum and Solana would all reach new all-time records first. He explained that, during a bull-market, Bitcoin is usually the first to reach its all-time highest. Then, Ethereum and Solana usually follow, heading towards their own record highs. This pattern has been used to predict the start of altcoin season in the past.
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VirtualBacon also noted that many new traders think it’s a mistake to jump right into tiny low-cap currencies during altcoin season. Altcoins actually rise in stages. The first mover is the large-cap coins such as Ethereum, Solana XRP and Cardano, followed by the mid-caps, and finally smaller, more risky tokens. Ethereum’s rally will be crucial for the rest, including meme coins, low-cap tokens and other cryptocurrencies.
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