Are altcoins gearing up for a major rally? 3 factors to consider

• One market analyst highlighted three pivotal factors contributing to the potential rally. 
• Most notably, the USDT Treasury has minted 1 billion USDT during this crucial period, signaling a ripe opportunity for market growth.

The broader crypto market, however, has witnessed a recent slowdown, recording a 2.87% decline in the past 24 hours that brought its total capitalization down to $2.04 trillion.

Altcoins have borne the brunt of this downturn.

Despite the intensified selling pressure and a modest increase in Bitcoin’s [BTC] market dominance—up 0.28% within the same timeframe—analysts remained optimistic about the altcoin market’s swift recovery in the near future.

Potential altcoin rally?

Crypto analyst Moustache predicted a forthcoming rally in the altcoin market, driven by several key technical alignments.

According to his analysis, multiple factors are converging that traditionally herald substantial price movements.

The primary indicator is the emergence of inverse head and shoulder patterns within a descending channel.

This pattern, characterized by price fluctuations between two diagonal lines—known as resistance and support—often precedes a strong breakout.

Such a breakout typically propels prices to the channel’s upper limit or beyond, signaling a bullish reversal.

Source: X

Adding to the bullish outlook is a golden cross observed in the Moving Average Convergence Divergence (MACD) identified in the yellow circle.

This occurs when the MACD’s blue line decisively crosses above the orange signal line, a phenomenon noted within a three-month descending triangle in recent trading periods.

Historically, this crossover is a strong indicator of rising momentum.

These technical confluences—head and shoulders pattern, MACD crossover, and channel dynamics—collectively improve the probability of a significant rally. 

The ultimate confirmation of an upward trend will be marked by breakouts both from the descending channel and in the MACD, pushing the price into a bullish zone.

Increased liquidity inflow adds optimism to the market

The crypto market is experiencing a surge in liquidity as more stablecoins enter circulation, which reflects the growing investor interest.

A major recent development was the minting of 1 billion USDT by Tether Treasury, an action typically indicative of heightened demand for stablecoins.

Investors often use these funds to purchase Bitcoin and other altcoins, suggesting an optimistic market outlook.

Additionally, Lookonchain reported that over the past few days, at least 50 million USDC—the second-largest stablecoin by market capitalization—was injected into the market, further increasing liquidity.

According to AMBCrypto, XRP and AAVE are positioned to benefit significantly from this trend, especially if the anticipated breakout from existing confluence patterns materializes.

XRP eyes major rally amid market resilience

Despite ongoing legal challenges with the U.S. Securities and Exchange Commission (SEC), XRP has maintained its position among the top 10 tokens by market capitalization, achieving a growth of 14.02% over the past year. 

Looking ahead, a significant shift in the altcoin market could propel XRP to new heights, targeting key liquidity zones at $0.74 and $0.936.

With increased momentum, XRP might revisit the $1 mark, a peak last seen in December 2021.

AAVE ready for growth with strong DeFi performance

AAVE has demonstrated remarkable growth over the past month, positioning it as a strong contender in the upcoming Altseason.

It recorded a substantial increase of 110.12% between the 5th of August to the 9th of September, although CoinMarketCap noted a monthly gain of 24.01%. 

As one of the leading decentralized finance protocols, AAVE ranked sixth in market cap. With the market set for movement, AAVE could potentially trade as high as $243.00, a level last reached in April 2022.