The current altcoin structure reflects a long consolidation phase where selling pressure gradually weakened without breaking key support.
A closely watched chart pattern has flipped bullish, and at least one analyst says it mirrors the setup that preceded some of the biggest altcoin rallies on record.
According to trader Mark Chadwick, the pattern has historically occurred just before rallies of between 2,000% and 10,000%.
Altcoins Flash Their Strongest Setup in Years, Analysts Say
Chadwick posted on X on May 13 that the altcoin market is showing “one of the cleanest setups we’ve seen since 2020.” In his view, alts have spent months consolidating along a long-term ascending support line, absorbing selling pressure without breaking down, and now momentum is starting to flip.
“That’s historically how Alt Season starts,” he wrote.
He pointed to the 2020-2021 cycle as the clearest comparison, saying that when similar signals appeared then, they pushed many major alts up by “2,000-10,000% within months.”
He also cited the Russell 2000 hitting all-time highs as corroborating evidence that broader risk appetite is returning, arguing that capital rotation out of safer assets and into higher-beta plays is already starting.
That view is quite similar to that shared by another analyst, Michaël van de Poppe, who said earlier in the week that altcoins are currently trailing Bitcoin by one to three weeks and that if the pattern continues, they could start posting gains between 100% and 300%, depending on liquidity conditions and market momentum.
Some on-chain data also offered backing for Chadwick’s thesis, with crypto analyst Darkfost noting that altcoin performance among tokens listed on Binance has returned to levels not seen since September 2025.
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Per his data, about 21% of Binance-listed altcoins have now reclaimed their 200-day moving averages. In February, only 2% of those assets held above that level. However, he was careful not to overstate the trend.
“It is far too early to start calling an altseason; the road ahead is still long and liquidity remains constrained,” he pointed out.
Liquidity and Regulation Remain Central Concerns for Traders
Despite the improving charts, some market watchers are still pointing to weak liquidity as a major obstacle for a bigger rally.
Darkfost himself noted that the crypto market has become heavily diluted, with at least 51 million altcoins now in circulation, with 46% of those tokens on Solana, while 36% are on Base and 10% are on BNB Smart Chain.
Macroeconomic concerns are also still weighing on sentiment. Darkfost cited the ongoing US-Iran conflict and inflation worries as factors that are still putting pressure on risk assets.
At the same time, traders are closely watching developments in Washington, with Chadwick, in an earlier post, suggesting that the Digital Asset Market Clarity Act of 2025 could encourage more institutional participation in crypto markets if it paves the way for clearer market structure rules.
The bill is scheduled for markup tomorrow, but has been hit with multiple amendments as well as more than 8,000 letters from members of the American Bankers Association opposing its stablecoin yield provisions.
