A closely watched technical setup is emerging across the altcoin market, and traders believe it could signal the start of a powerful new rally.
According to analyst Merlijn The Trader, the combined market capitalization of altcoins is shaping a classic cup-and-handle pattern, a formation often seen as a prelude to major breakouts.
Pain, Disbelief, and What Comes Next
“The cup was built in pain, and the handle is being built in disbelief,” Merlijn noted. The idea is that long corrective phases (the “cup”) are followed by a smaller consolidation (the “handle”), paving the way for renewed upside momentum. Once the pattern completes, traders typically anticipate an acceleration in buying pressure.
For altcoins, that breakout target could be extraordinary. The analyst suggested that a surge toward a $3 trillion total market cap is within reach if the structure plays out.
Altcoin Market Dynamics
At present, the altcoin market cap (excluding Bitcoin and Ethereum) sits around $1.09 trillion. Despite setbacks through 2022 and 2023, the recovery in 2024–2025 has brought valuations back into a range where technical patterns like this gain relevance.
Historically, cup-and-handle setups have led to sustained bullish phases across both traditional equities and crypto markets. While not guaranteed, the symmetry of the current formation has caught traders’ attention, with some calling it “too clean to fade.”
What It Means for Traders
If the pattern confirms, a rally toward new highs would likely drive capital rotation from Bitcoin and Ethereum into mid- and lower-cap tokens. This could mirror past market cycles where altcoins dramatically outperformed once confidence returned.
Still, risks remain. Global liquidity conditions, regulatory decisions, and macroeconomic pressures could disrupt the setup. But with sentiment slowly improving, the possibility of a $3 trillion altcoin market is becoming harder for traders to ignore.
Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.
