Despite a recent dip of nearly 20% in the altcoin market cap over the last month, traders are holding onto their optimism, foreseeing a potential surge in what they describe as an upcoming "explosive rally" phase.

Current market sentiment suggests that the altcoin market is hovering within the realms of what analysts term as the "disbelief stage," a phase historically followed by significant surges, as per observations from crypto traders closely monitoring three pivotal technical indicators for validation.

Mikybull Crypto, a prominent crypto analyst, shared insights with their substantial following of 66,600 individuals on May 11, asserting that the present state of the altcoin market mirrors the disbelief stage, a precursor to what could be an impending explosive rally.

The disbelief stage typically manifests when investors exhibit skepticism despite positive market indicators. This sentiment is underscored by a notable 24-point drop on the Crypto Fear and Greed Index over the past 30 days, with the current "Greed" score resting at 56.

In tandem with this sentiment shift, the total altcoin market cap, excluding the top 10 cryptocurrencies, has witnessed a 17.55% downturn over the same period, now standing at $264.9 billion, according to TradingView data. Nevertheless, it has managed to maintain its position above the critical support level of $250 billion, signaling a potential upward trajectory, as highlighted by Rekt Capital, a respected pseudonymous crypto trader, to their audience of 465,300 followers on May 12.

Market participants are closely monitoring three key indicators across the broader crypto landscape — namely, the 20-day exponential moving average (EMA), the stochastic relative strength index (RSI), and Bitcoin dominance — to substantiate their forecasts regarding the altcoin market's trajectory.

The EMA serves as a gauge of the average price over a defined period, assigning more weight to recent data. Should the total crypto market cap undergo a "retest" of the EMA20 and simultaneously experience a "bullish crossover" on the stochastic RSI, a significant surge may be on the horizon, as articulated by Titan of Crypto, a prominent pseudonymous crypto trader, in a May 11 post.

The Bitcoin dominance chart, a longstanding and widely referenced metric, measures Bitcoin's market share relative to the entire crypto market. It offers insights into overall investor sentiment and risk appetite within the market.

As of the time of publication, Bitcoin's dominance stands at 54.7%, marking a 0.56% decline over the past week. According to assertions made by Yoddha, a pseudonymous technical analyst, in a May 11 post, a further decline from this point onward could potentially herald the onset of an "altseason."