3 signals that point to altcoin season

So when is the altcoin season or the famous alt season? That’s the question on the minds of many traders and investors who have suffered greatly over the past two years. First, the deep bear market of 2022 knocked their favorite cryptocurrencies to multi-year lows. Subsequently, altcoin enthusiasts had to watch with envy the rise of Bitcoin (BTC), whose price rose by 180% in 2023.

Meanwhile, Ethereum (ETH), the largest altcoin by market cap, recently hit an 18-month low against Bitcoin. So some even question whether ETH is “dead”. And if ETH fails, the entire altcoin market will be left behind. So does this mean the next altcoin season will be nothing more than a wild dream?

Despite this, there are signals on several charts that could point to an upcoming alt season. These signals really relate to both altcoin market cap (TOTAL2), altcoin index, and ETH price action.

Altcoin Market Cap Poised To Explode?

From a November 2021 high of $1.71 trillion to a June 2022 low of $427.57 billion, the market cap index (TOTAL2) trended down. Then, from mid-2022 to November 2023, altcoins entered a long-term accumulation phase. Thus, their capitalization moved along a parallel channel ranging from USD 494 billion (green line) to USD 657 billion (red line).

During this period, the key resistance level remained at $657 billion, which repeatedly served as support during the bull market and resistance during the accumulation phase (blue arrows). It was only in November 2023 that the altcoin capitalization managed to overcome this resistance and leave its long-term accumulation range.

This breakthrough is confirmed by two important technical events. First, the chart generated a long-term bullish structure. After generating the upper peak (HH from English higher high) and a lower peak (HL from English higher low), the second upper peak has just appeared. This indicates the beginning of a long-term uptrend.

Altcoin market cap by TradingView
Altcoin market cap using TradingView

In addition, this breakthrough is also confirmed by the trading volume of altcoins, which crossed the descending resistance line (blue arrow). This resistance line has been in place since the mid-2021 altcoin season; therefore, its crossing represents a very bullish signal.

The next target for TOTAL2 is another long-term resistance at $942 billion. Once this is achieved, we can expect a correction and verification of the breakout zone located at $657 billion as support.

Moreover, another confirmation of the upcoming altcoin season can be found in the fractal structure of the TOTAL2 chart, recently published by a famous analyst @el_crypto_prof. Indeed, he pointed out that this is the third time in its history that altcoin capitalization has generated a double bottom or double dip pattern with a higher low and a false breakout.

The previous two times were in 2016 and 2020. Both times saw an exponential upward movement and a strong altcoin season.

TOTAL2 chart / Source:
TOTAL2 chart / source: X

Alt Season To End Bitcoin Year?

The second signal in favor of the upcoming movement of altcoins is the famous alt season index. This index tracks the performance of altcoins against Bitcoin at three intervals: monthly, quarterly, and annually. And it is the latter that indicates an impending change in trend.

The above analyst @el_crypto_prof noted va another of his tweets that the indicator only repeats the fractal structure of 2020. In particular, he wrote:

“Altcoin Season Index Shows We Are About To Leave The $BTC Zone.”

End of the Bitcoin Year / Source: blockchaincenter.net
The end of the Bitcoin year. Source: blockchaincenter.net

This means that the altcoin vs. Bitcoin fight that has been going on for about 2 years may soon be over. If this long-term indicator behaves similarly to 2020, then we can expect a strong altcoin season in 2024.

Ethereum at the top of a strong uptrend

Finally, the last signal in favor of the altcoin season is the Ethereum (ETH) price chart itself. Although the ETH/BTC pair is currently at its long-term low, now is a great time to go long.

If a double bottom scenario plays out and ETH rebounds from the 0.052 BTC level, it could quickly reach the nearest resistance at 0.085 BTC. However, if that fails and Ethereum collapses, the next support is at 0.04 BTC. Reaching this level would allow the price to confirm the previous resistance zone of 2018-2021.

ETH/BTC Chart by TradingView
ETH/BTC chart. ETH/BTC Chart: TradingView

On the other hand, ETH is forming a bullish structure in its USDT pair, the fractal of which was repeated just before the previous bull market. This is what the trader on X pointed out @IamCryptoWolf in a recent post.

According to him, “the chart is self-explanatory” as it shows a similar structure to the price action of the second half of 2020. If Ethereum manages to hold the $1935 level and confirm it as support, an exponential rise could begin. If the previous bull market scenario repeats itself, then ETH could see a sharp rise over the next 18 months.

ETH/USDT chart / Source: X
ETH/USDT chart. source: X

Moral of the story: Altcoin season always hits when you least expect it.


Disclaimer: In accordance with The Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased information, but market conditions may change without notice. Always do your own research and consult with an expert before making any financial decision.

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