Altcoins may be on the verge of a major breakout after nearly seven years of consolidation, according to technical analyst Merlijn The Trader. His chart of the total altcoin market cap (excluding Bitcoin and Ethereum) reveals an enormous ascending triangle formation, showing higher lows since 2018 but capped under the 2021 peak.
"This triangle is fully matured," Merlijn stated. "And triangles resolve violently. When this breaks... altcoins will detonate."
The setup implies that a confirmed breakout above the 2021 high could unleash a new altcoin cycle, potentially driving total altcoin capitalization above $2 trillion for the first time.
Ethereum Holds the Line: $3.5K as the Decider for Bulls
Meanwhile, Ethereum, the leading indicator for broader altcoin momentum, is trading within a crucial range between $2.8K and $4.1K, as outlined by DaanCrypto Trades.
ETH recently bounced off its 3D 200MA/EMA and the 0.618 Fibonacci retracement level, suggesting that bulls are still defending mid-range support. "This is a key area to hold," Daan noted. "Losing it could trigger a retest of $2.8K."
He added that the $3.5K level remains an important line in the sand from October’s flush, while traders should play the range cautiously: "Don’t get too bearish at support or too excited against resistance."
Why This Matters for the Altcoin Market
Ethereum’s stability has historically acted as a catalyst for wider altcoin rallies. If ETH maintains strength and Bitcoin stabilizes near $100K, analysts believe capital rotation into altcoins could accelerate, echoing the explosive runs seen in 2021.
With the altcoin market cap pressing against multi-year resistance and volatility nearing record lows, technical analysts agree: this compression phase is nearing its end. When it breaks, the move could redefine the next crypto cycle.