According to cryptocurrency traders, many altcoins are currently showing a “bullish pattern” that could soon see the market enter an “up only season” if all goes as expected. ”
“The altcoin seasonal index has been forming one of the most bullish patterns for 3.5 years,” declared anonymous analyst Mustache in a post to X on October 11.
The analyst noted an inverse head and shoulders (IH&S) chart pattern formed on Blockchaincenter’s Altcoin Season Index chart for the period 2022-2024.
The inverted head and shoulders pattern is a bullish indicator that the downtrend is easing and buyers are becoming more dominant in the market. This means that Bitcoin (BTC)’s dominance may begin to wane and altcoins begin to perform better, signaling the start of altcoin season.
“I think the season is close.” Mustache added.
The altcoin seasonal index forms an IH&S pattern. Source: Mustache
According to Blockchaincenter, the index is showing signs of recovery but is currently sitting at 39. This means that of the top 50 cryptocurrencies by market capitalization, only 39% have performed better than Bitcoin over the past 90 days. This falls short of the 75% level needed to declare altcoin season.
Meanwhile, the stochastic RSI, a momentum oscillator that measures the relative position of RSI within its range over a specific time period, produced a bullish crossover on the three-week chart. Independent analyst Crypto’s Titan claims that this is a signal that: A major #Alts rally could be coming soon.”
A bullish crossover occurs when the stochastic RSI crosses above the signal line, indicating a potential uptrend.
“Typically, a bullish crossover on the 3-week Stochastic RSI is followed by a strong upward move.”
Stochastic RSI produces a bullish crossover. source: The Titan of Cryptocurrency
relevant: Uniswap (UNI) recorded a 25% weekly gain due to the launch of Unichain.
The overall market capitalization of altcoins is starting to look optimistic.
The altcoin’s continued recovery is part of a rebound in TOTAL3, the total market capitalization of all cryptocurrencies except Bitcoin (BTC) and Ethereum (ETH), that began on September 6.
TOTAL2 rose 19% from a low of $516.7 billion on September 6 to a high of $617.8 billion on October 7, before falling back to its current value of $601.5 billion, according to data from Cointelegraph Markets Pro and TradingView. This rally pushed TOTAL3 above a key support area ranging from $589 billion to $596 billion, as shown in the daily chart below.
Note that all major moving averages, including the 50-day exponential moving average (EMA), 100-day EMA, and 200-day EMA, lie within this demand area.
Traders booked profits as the Relative Strength Index (RSI) on the daily chart reached a nearly overbought level of 69 on September 30, suggesting that altcoins are overvalued.
Total cryptocurrency market capitalization excluding BTC. source: TradingView
The altcoin remains above the rising trend line and is still pursuing an upward trend. RSI’s movement from 45 to 53 over the past three days suggests that market conditions favor an uptrend.
If TOTAL3 stays above the key resistance areas mentioned above, the altcoin could continue its recovery and a sustained recovery could signal the start of the long-awaited alt season.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.