“Largest Altcoin Bull Run of All Time Is Loading,” Analyst Says as Key Charts Break Out

The altcoin market may be approaching a turning point after several major gauges broke out of year-long downtrends, according to analyst Matthew Hyland.

His charts suggest smaller cryptocurrencies are gaining ground against Bitcoin and traditional risk assets, although rising leverage also increases the odds of a painful correction.

Altcoin Gauges Break Long Downtrends

ETH, Total 2, Total 3, and OTHERS had all confirmed the end of their year-plus declines by forming higher highs. Let’s break that down a bit.

Total 2 tracks altcoins excluding Bitcoin, while Total 3 removes both BTC and Ethereum. OTHERS excludes the top 10 cryptocurrencies and therefore focuses more heavily on smaller tokens.

Hyland questioned whether the moves were simply a “bear market rally,” then followed up with a more bullish assessment.

The largest #Altcoin Bull Run of all time is loading, and it could be “much larger than 2020-2021.” The accompanying OTHERS.D/SPX chart provided the basis for that view. It compares the dominance of cryptocurrencies outside the top 10 to that of the S&P 500.

The ratio has been falling for years after reaching a major peak during the 2017-2018 ICO period, and the chart places the current reading near the lower end of that long decline. A lower oscillator on the chart has also moved into an oversold area around 20-30, and the setup is being compared with the overbought reading near 80 seen in 2017.

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But that does not prove that a new altcoin cycle has started. It does show why Hyland believes the market may be approaching a period of relative strength for smaller tokens.

Leverage Adds Another Side to the Trade

The shift comes as altcoins outside the top 10 have pushed their combined market capitalization to $213 billion, up nearly 12% since the start of September.

Zcash has been one of the dramatic examples. Yesterday, as CryptoPotato reported, it surpassed $1,200, up 370% from its early-June low. Its market cap also moved above $20 billion, putting it ahead of Hyperliquid (HYPE) and Dogecoin (DOGE), both of which were still at the time of writing, having gained over 11% in 24 hours.

DOGE itself and BNB also posted strong moves in that period, with the former climbing 12% from its Friday low to $0.094, while BNB went close to $780, its highest level since early February.

But there’s a warning. ZEC perpetual futures open interest reached $2.7 billion per CoinGlass, while its move above $1,200 triggered $24 million in liquidations in the last 24 hours, more than $17 million of that being shorts, and historically, similar shifts in derivatives positioning have come right before corrections in mid-cap tokens.

That leaves two competing signals: the breadth of the altcoin move is improving, and several long-term charts have broken higher, but at the same time, leverage is building quickly. However, as things stand, Hyland sees the first as evidence that the market could be entering a much larger altcoin phase.