Crypto analysts are pointing to historical patterns to suggest the massive weekend liquidation event may have created conditions for a major altcoin rally, potentially marking the start of altseason 3.0.
Market researcher Bull Theory noted that every major crypto expansion has included sharp resets ranging from 30% to 60%. The March 2020 pandemic crash wiped nearly 70% off markets, while May 2021 saw over 50% erased.
At least five additional 30% to 40% altcoin slumps occurred during the previous bull market cycle. Each of these downturns was followed by the strongest rallies of the cycle, despite appearing catastrophic at the time.
Weekend losses hit altcoins particularly hard, with XRP dropping at least 18%, Solana falling 22%, DOGE declining 28%, and LINK down 26% in a single day. The pattern mirrors previous market resets before significant rallies.
Analyst Ash Crypto recalled that after the March 2020 flash crash, altcoins pumped between 25x and 100x during the subsequent altseason. He believes similar price action will repeat following the recent market flush.
Merlijn The Trader identified setup signals for altseason 3.0 through a monthly bullish MACD cross on the Bitcoin/altcoins chart. The same pattern appeared in 2017 and 2021 before major alt rallies.
The total crypto market capitalization dipped back below the $4 trillion psychological threshold on Tuesday. Bitcoin led losses with a 1.4% decline, falling below $113,500 even as several altcoins posted daily gains.
Bitcoin dominance formed its first red weekly candle in five weeks, dropping below 59% on Tuesday, according to TradingView. The metric serves as a key indicator of altcoin performance relative to Bitcoin's market position.