Breakdown Looming in Altcoin Market Cap? Weekly Chart Analysis
The Crypto Total Market Cap Excluding Top 10 is currently flashing a textbook Head and Shoulders (H&S) reversal pattern on the weekly timeframe — and if confirmed, it could signal a substantial decline in the altcoin sector's market value.
Let’s dive into the technical breakdown and market psychology behind this setup.
🧠 The Pattern Breakdown: Head & Shoulders
Left Shoulder (L): Formed in early 2024 after a sharp rally met resistance just below $320B, leading to a correction.
Head (H): Marked a peak in Q1 2025 above $400B — but failed to hold, rejecting at a key liquidity zone and forming a long wick.
Right Shoulder (R): Projected in the current price structure. A potential retracement to the $320B region could form this, completing the right shoulder before the breakdown.
Neckline (N): Currently being tested at the $200B mark — this is the make-or-break level. A confirmed weekly close below this line would activate the bearish pattern.
📉 Target Projection & Technical Implications
If the Head & Shoulders structure plays out:
Breakdown below Neckline (~$200B) would likely initiate a measured move towards $80B–$100B, completing the pattern.
This aligns with a major liquidity void seen from mid-2023, where price previously moved rapidly — meaning there’s little structural support in that zone.
🔍 Confluence Factors Supporting Bearish Outlook:
Liquidity Void: Below the neckline, there’s a high-risk vacuum where price may drop quickly.
Volume Decline on Rallies: Bullish impulses are weakening, suggesting distribution rather than accumulation.
Lower High Structure: Overall macro structure is shifting from bullish to neutral/bearish.
Failed Reclaim of Key Resistance (~$360B): Shows weakness in altcoin market interest.
🧠 Trading Mindset & Strategy Ideas:
For savvy traders and institutions, this is a high-probability short bias setup to monitor. While retests of the neckline often offer premium short entries, managing risk here is essential.
Scenarios to Watch:
✅ Bearish Confirmation: Weekly candle closes below neckline with increasing volume.
🔁 Bull Trap Potential: Price briefly reclaims $240B–$260B then rejects hard — classic fakeout behavior.
🛡️ Invalidation: A breakout above the “Head” (~$420B) level invalidates the bearish setup and resumes bullish structure.
🚨 Final Words: Altseason or Alt-geddon?
The altcoin space is currently sitting on the edge of a cliff. This isn’t just another dip — this is a potential macro reversal pattern forming across months of price action. If you’re holding heavy bags of alts, it might be time to hedge or scale out while monitoring the neckline area closely.
For traders, this is where capital preservation meets calculated aggression.
✍️ Written by a chart analyst who sees opportunity in both sides of the market.
Let’s dive into the technical breakdown and market psychology behind this setup.
🧠 The Pattern Breakdown: Head & Shoulders
Left Shoulder (L): Formed in early 2024 after a sharp rally met resistance just below $320B, leading to a correction.
Head (H): Marked a peak in Q1 2025 above $400B — but failed to hold, rejecting at a key liquidity zone and forming a long wick.
Right Shoulder (R): Projected in the current price structure. A potential retracement to the $320B region could form this, completing the right shoulder before the breakdown.
Neckline (N): Currently being tested at the $200B mark — this is the make-or-break level. A confirmed weekly close below this line would activate the bearish pattern.
📉 Target Projection & Technical Implications
If the Head & Shoulders structure plays out:
Breakdown below Neckline (~$200B) would likely initiate a measured move towards $80B–$100B, completing the pattern.
This aligns with a major liquidity void seen from mid-2023, where price previously moved rapidly — meaning there’s little structural support in that zone.
🔍 Confluence Factors Supporting Bearish Outlook:
Liquidity Void: Below the neckline, there’s a high-risk vacuum where price may drop quickly.
Volume Decline on Rallies: Bullish impulses are weakening, suggesting distribution rather than accumulation.
Lower High Structure: Overall macro structure is shifting from bullish to neutral/bearish.
Failed Reclaim of Key Resistance (~$360B): Shows weakness in altcoin market interest.
🧠 Trading Mindset & Strategy Ideas:
For savvy traders and institutions, this is a high-probability short bias setup to monitor. While retests of the neckline often offer premium short entries, managing risk here is essential.
Scenarios to Watch:
✅ Bearish Confirmation: Weekly candle closes below neckline with increasing volume.
🔁 Bull Trap Potential: Price briefly reclaims $240B–$260B then rejects hard — classic fakeout behavior.
🛡️ Invalidation: A breakout above the “Head” (~$420B) level invalidates the bearish setup and resumes bullish structure.
🚨 Final Words: Altseason or Alt-geddon?
The altcoin space is currently sitting on the edge of a cliff. This isn’t just another dip — this is a potential macro reversal pattern forming across months of price action. If you’re holding heavy bags of alts, it might be time to hedge or scale out while monitoring the neckline area closely.
For traders, this is where capital preservation meets calculated aggression.
✍️ Written by a chart analyst who sees opportunity in both sides of the market.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.