A widely followed chart pattern has turned bullish, and at least one analyst says it resembles the setup that preceded some of the largest altcoin rallies on record.
Trader Mark Chadwick says the pattern has historically shown up just before rallies ranging from 2,000% to 10,000%.
Analysts: Altcoins Display Strongest Setup in Years
On May 13, Chadwick posted on X that the altcoin market is demonstrating “one of the cleanest setups we’ve seen since 2020.” He argues that altcoins have spent months consolidating along a long-term ascending support line, absorbing selling pressure without breaking down, and that momentum is now beginning to shift upward.
“That’s historically how Alt Season starts,” he wrote.
Chadwick highlighted the 2020–2021 cycle as the most relevant comparison. When similar signals appeared then, many major altcoins rallied by “2,000–10,000% within months,” he noted.
He also pointed to the Russell 2000 reaching all-time highs as supporting evidence that broader risk appetite is returning, suggesting capital is rotating out of safer assets into higher-beta investments.
This view aligns with commentary from another analyst, Michaël van de Poppe, who said earlier in the week that altcoins are lagging Bitcoin by roughly one to three weeks. If that pattern holds, van de Poppe suggested altcoins could potentially post gains of 100%–300%, depending on liquidity and market momentum.
Some on-chain metrics also lend support to Chadwick’s thesis. Crypto analyst Darkfrost observed that altcoin performance among tokens listed on Binance has recovered to levels not seen since September 2025.
According to his data, about 21% of Binance-listed altcoins have reclaimed their 200-day moving averages; in February, only 2% were above that threshold. Still, he cautioned against overinterpreting the early signs.
“It is far too early to start calling an altseason; the road ahead is still long and liquidity remains constrained,” he said.
Liquidity and Regulation Remain Key Concerns
Despite improving technical setups, several market participants continue to flag weak liquidity as a major constraint on a broader rally.
Darkfrost pointed out that the crypto landscape is highly diluted, with at least 51 million altcoins in circulation. Of those tokens, roughly 46% sit on Solana, 36% on Base, and 10% on BNB Smart Chain, which can fragment capital and dampen concentrated buying power.
Macro factors are also weighing on sentiment. Darkfrost referenced the ongoing US–Iran tensions and renewed inflation concerns as pressures that could keep risk assets subdued.
At the same time, market participants are watching regulatory developments closely. Chadwick suggested in an earlier post that the Digital Asset Market Clarity Act of 2025 could spur greater institutional participation if it clarifies market structure rules for digital assets.
The bill is set for markup, but it has faced numerous amendments and substantial pushback: the American Bankers Association alone submitted more than 8,000 letters opposing provisions related to stablecoin yields.
In short, technical indicators and some on-chain data point to an improving setup for altcoins, yet constrained liquidity, macro uncertainty, and regulatory debate mean any significant rally will likely depend on how these factors evolve in the coming weeks and months.