Altcoin Bull Run Poised for Record Highs, Analyst Claims

Altcoin Market at a Potential Turning Point, Analyst Suggests

The altcoin market may be poised for a significant shift, with several key indicators breaking out of year-long downtrends, according to analyst Matthew Hyland. His analysis suggests that smaller cryptocurrencies are gaining momentum against Bitcoin and traditional risk assets, though a rise in leverage also heightens the risk of a sharp correction.

Chart Breakouts Signal Potential Shift

In a September 7 post, Hyland highlighted that Ethereum (ETH), Total 2 (tracking altcoins excluding Bitcoin), Total 3 (excluding Bitcoin and Ethereum), and OTHERS (focusing on tokens outside the top 10) have all signaled the end of their extended declines by forming higher highs.

Bullish Outlook for Altcoins

Hyland initially questioned whether these movements were merely a “bear market rally” but later offered a more optimistic assessment. In a subsequent post, he stated, “The largest #Altcoin Bull Run of all time is loading,” predicting it could surpass the gains seen in 2020-2021. This forecast is supported by a chart comparing the dominance of cryptocurrencies outside the top 10 against the S&P 500 (OTHERS.D/SPX).

This ratio has been in decline for years following a peak during the 2017-2018 Initial Coin Offering (ICO) boom. The current reading is positioned near the lower end of this long-term downtrend. Furthermore, an oscillator on the chart has entered oversold territory around 20-30, a setup being compared to the overbought conditions near 80 observed in 2017. While this doesn’t definitively confirm a new altcoin cycle, it underpins Hyland’s belief that smaller tokens may be entering a period of relative strength.

Increased Trading Activity and Market Cap Growth

Evidence of heightened trading activity is emerging, with data from Coinalyze indicating that altcoin perpetual futures open interest has surpassed Bitcoin’s for the first time since December 2024. This shift coincides with altcoins outside the top 10 seeing their combined market capitalization rise to $213 billion, an increase of nearly 12% since the beginning of September.

Notable Altcoin Performances

Zcash (ZEC) has been a standout performer, recently surpassing $1,200—a 370% surge from its early June low. Its market capitalization also moved above $20 billion, positioning it ahead of Hyperliquid (HYPE) and Dogecoin (DOGE) at the time of writing. Both HYPE and DOGE had experienced gains exceeding 11% in the preceding 24 hours. Dogecoin itself and BNB also posted significant gains, with DOGE climbing 12% from its Friday low to $0.094, while BNB approached $780, its highest level since early February.

Warning Signs of Leverage

However, a cautionary note has been sounded. Zcash perpetual futures open interest reached $2.7 billion, according to CoinGlass. The cryptocurrency’s move above $1,200 triggered $24 million in liquidations over the past 24 hours, with over $17 million of that amount being short positions. Historically, similar shifts in derivatives positioning have preceded corrections in mid-cap tokens.

Competing Signals and Future Outlook

The market currently presents two contrasting signals: improving breadth in altcoin movements and breakouts on several long-term charts, juxtaposed with rapidly accumulating leverage. Despite these competing factors, Hyland views the positive chart developments as strong indicators that the market may be entering a more substantial altcoin phase.