A widely followed crypto analyst says the altcoin market could start breaking out if one key event occurs.
In a new video, analyst Nicholas Merten tells his 509,000 YouTube subscribers that if Bitcoin (BTC) starts flipping resistance levels into support, altcoin rallies may start within the next few weeks.
“We talked about one of two [Bitcoin] scenarios playing out. We talked about either having the more painful scenario… when we come down to the 200-week moving average [around $38,000], which definitely, I think, is still in the cards if we don’t see price action development over the next couple of days.
Or we have a scenario here where we may be seeing an inverse head and shoulder, or at a minimum a reclaim of the prior lows from back in July, clearing through our short-term moving averages and starting to trend higher here, hopefully getting into a position where we could start to charter to new all-time highs again. That’s the kind of stuff that is going to, over the next few weeks, give altcoins a foundation to be able to start really trending higher, for clear narratives to start showing up.”
An inverse head and shoulders pattern (I-HNS) is a technical formation with bullish implications as the right shoulder suggests that bulls are willing to accumulate the asset without waiting for the price to drop to its previous low.
Merten also says Bitcoin is setting up a strong market structure on the hourly chart. He is closely watching whether the flagship digital asset can reclaim $60,000.
“What we are seeing is the first initial step. We have set in and reclaimed that low that we saw back in July around $52,500… Since then, we’ve been slowly, but steadily trending up… and now we are resting on support here on our four-hour EMAs (exponential moving averages)…
If we can hold on to those moving averages and squeeze up to around $60,000 for a nice daily close above that 21-day EMA that is going to be really positive sign here…
Then it’s going to be the next question of getting above these long-term moving averages. If you get above $65,000, if we’re getting a weekly close above there, that’s a huge tick-off box positive for the bulls and their narrative that we’re going higher.”
Bitcoin is trading for $58,126 at time of writing.
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