There’s a potential for a huge macro inverse head-and-shoulders formation in the altcoin market cap chart.

Some analysts say that technical analysis of total market capitalization charts is a rather dubious exercise and a sort of guilty pleasure for chartists, as there’re no buy and sell orders to directly determine support and resistance levels or any kind of chart patterns.

On the other hand, many people say more or less the same about TA per se. Their favorite argument - “All the knowledgeable people I’ve asked say it”doesn’t work.” Proving the contrary is barely possible (and hardly necessary), given that we are actually talking about rather individual approaches and tools to set some reference in the face of future uncertainty. In that sense, it’s unclear how a knowledgeable majority would think TA should have “worked,” and why not try to use it on any chart where it seems reasonably applicable.

Back to the possible inverted Head-and-shoulders on the total market cap chart, crypto Twitter has been watching for their formation since March, no less:

The breakthrough has since occurred, but the big fun hasn’t happened yet, nor has the pattern invalidation. Only the right shoulder looks different today:

“The altcoin market cap is showing some sort of triple bottom/inverted head-and-shoulders situation,” said in a market update Josh Olszewicz, a former researcher at Valkyrie Investments and a crypto trader. According to an analyst, a potential completion of the pattern would signal “alt season,” or the outperformance of altcoins relative to bitcoin.

The inverse head-and-shoulders is a well-known bullish technical analysis pattern, occurring when an asset forms three consecutive price troughs, with the middle trough being the lowest. The confirmation of the transition from a bearish trend to a bullish one is a breakout, manifested by the price crossing the trend line (neckline) connecting the peaks between the lows.

However, as shown in the chart above, the market continues to consolidate in the uncertainty range, and the pattern is still waiting for its confirmation (or invalidation).

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MetaTalks disclaims responsibility for any investment advice that may be contained in this article. All judgments expressed are solely the personal opinions of the author and the respondents. Any actions related to investing and trading in crypto markets involve the risk of losing funds. Based on the data provided, you make investment decisions in a balanced, responsible manner and at your own risk.