These 3 signs indicate that the Altcoin season is not far off
When is the altcoin season? This is the question that many businessmen and investors who have suffered a lot in the last two years are asking themselves. First, the deep bear market of 2022 pushed your favorite cryptocurrencies to multi-year lows. Later, altcoin fans had to watch with envy as Bitcoin (BTC) rose 180% by 2023.
At the same time, Ethereum (ETH), the largest altcoin by market capitalization, recently recorded an 18-month low against Bitcoin. Because of this, some wonder if ETH is dead. And if ETH is not doing well, the entire altcoin market will remain in retreat. Does this mean that the next altcoin era will remain a dream?
Despite this, there are signs on many charts that point to the upcoming altcoin season. They concern both the altcoin market capitalization (TOTAL2), the altcoin index and the ETH price action itself.
Altcoin market capitalization is ready to take off.
From a November 2021 peak of $1.71 trillion to a June 2022 low of $427.57 billion, the market capitalization index (TOTAL2) has been trending downward. Then, from mid-2022 to November 2023, altcoins were in a long-term storage phase. It runs in a parallel channel between $494 billion (green line) and $657 billion (red line).
During this period, the key resistance level remained at 657 billion dollars, which served as both support and resistance (blue arrows) during the bull market. It wasn't until November 2023 that the altcoin capitalization was able to break through this resistance and leave the long-term storage range.
The break is confirmed by two important technical events. First, the chart developed a bullish long-term structure. After generating a higher high (HH) and a higher low (HL), a second higher high is currently seen. This marks the beginning of a long-term growth.
Moreover, the break is confirmed by the trading volume of the altcoin, which has broken above the descending resistance line (blue arrow). This defensive line has been in place since the altcoin season in mid-2021, so breaking it is a very difficult signal.
The next target of TOTAL2 is long-term defense with 942 billion dollars. Once it arrives, one can wait for correction and confirmation of the $657 billion in support.
Also, an additional confirmation of the upcoming altcoin season is the fractional structure of the TOTAL2 chart recently published by the famous analyst @el_crypto_prof. He pointed out that this is the third time in history that an altcoin capitalization has created a double bottom with a higher low and false spark.
The last two times happened in 2016 and 2020. In both cases, it was a bullish and strong altcoin season.
Altcoin phase index Bitcoin year ends
The second signal that supports the upcoming altcoin movement is the well-known Altcoin Season Index. This index tracks the performance of altcoins against Bitcoin at three intervals: monthly, quarterly and annually. And it's the latter that indicates the trend change that's coming.
The aforementioned analyst @el_crypto_prof in another of his tweets said that the indicator is repeating the 2020 fractal structure. wrote:
“Altcoin Phase Index Shows We Are On The Brink Of Exiting The $BTC Zone.”
This means that the suffering of altcoins on Bitcoin for almost 2 years may end soon. If this long-term indicator behaves similarly, a strong altcoin season is expected in 2024 as it did in 2020.
Ethereum on the verge of strong growth
Finally, the last sign supporting the altcoin season is the Ethereum (ETH) price chart. Although the ETH/BTC pair is currently at long-term lows, it may be a good time to take a long position here.
If the double-bottom scenario plays out and ETH breaks above the 0.052 BTC level, it can quickly rise to the resistance at 0.085 BTC. However, if this fails and Ethereum falls, the next support is at the level of 0.04 BTC. Achieving this level will be the confirmation of the previous 2018-2021 defense environment.
In contrast, ETH is in the process of forming a bullish structure paired with USDT, a segment that was repeated before the previous bull market. This was pointed out in a recent post by trader @IamCryptoWolf on X.
According to him, “the chart is self-explanatory” because it shows a similar structure to the price action of the second half of 2020. If Ethereum holds the $1935 level and proves it as a support, it could be an exponential upward movement. kick off. If the past bull market scenario repeats itself, ETH could experience a significant rally in the next 18 months.
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