Just a few days ago, only six of the top 50 altcoins were outperforming Bitcoin (BTC). But today, things have changed, and new speculation about an altcoin season is pouring in.
What’s interesting about this development is that not only are there three new cryptocurrencies added, but all of these new entrants are in the top 10 by market cap. These include Solana (SOL), Ethereum (ETH), and Ripple (XRP).
Rotating to altcoins is riskier but more rewarding?
It is important to note that altcoin season begins when at least 75% of non-Bitcoin cryptocurrencies outperform BTC. However, only 9 have done so, so the period of altcoin dominance is yet to be confirmed.
As mentioned above, the performance of SOL, ETH, and XRP is boosting market confidence. Glassnode founders Jan Happel, Rafael Schultze-Kraft, and Yann Allemann also agree with this assertion.
Negentropic, founder of the on-chain analytics platform, said that the crypto market could soon see capital rotating into riskier assets using the shared X account.
First, they compared changes in existing markets and used that to infer potential changes in the cryptocurrency market.
“Will this happen with BTC and Alts? Well we had a day like yesterday in November 2020. IWM spiked and continued to rally for the next few months. This was the starting signal for the strongest part of the Alt rally for the next 4 months with Total3 up ~400% in just 4 months. Will the same happen again? Will there be a massive rally in Alts with rotation? I think it’s very likely!” posted Negentropic on July 12th.
Moreover, the addition of Solana, Ripple, and Ethereum is related to price movements.
Over the past 7 days, the price of SOL has risen by 9.31%, ETH has jumped by 9.56%, and XRP has shown the biggest gains with a surprising 21.97%.
As the long-awaited altcoin season approaches, let’s take a look at what cryptocurrencies will look like.
Solana (SOL) Aiming for Price Increase After 9% Rise
The current SOL/USD daily chart shows that this altcoin has formed a symmetrical triangle. This chart pattern is characterized by converging trend lines connecting a series of lower highs and higher lows.
Lower highs act as resistance, while higher lows act as support. In addition, the price of SOL is trying to break out of the triangle. If this happens, Solana will leave the consolidation phase and head towards a huge breakout.
Also, the Fibonacci correction indicator shows potential resistance and support points for the token. As you can see in the chart below, SOL can rise to $162.79 in the coming days.
Read more: What is Altcoin Season? A Comprehensive Guide
Here is the 0.618 Fibonacci position. If successful, this could retest the altcoin price at $174.59. However, in the case of a pullback, the price of SOL could go back to $135.97.
Ethereum (ETH) Breaks Key Resistance Level, Sets at $3,622
At the time of writing, ETH is trading at $3,360. The price is also trading above the 20-day EMA (blue). EMA stands for Exponential Moving Average, which measures the change in price direction over a period of time.
If the EMA is above the price, it means the trend is bearish. However, since ETH is changing hands above the 20 EMA, it means the trend is bullish. Also, the RSI (Relative Strength Index) supports this bias.
The RSI measures momentum and since it is above the neutral line, it means that the bulls are in control of ETH’s movements. Evidence of this is the breakout of the $3,255 resistance level and the $2,946 defense level.
If momentum remains strong and the hype surrounding the Ethereum ETF launch continues, the price could reach $3,622. However, if selling pressure comes into play, the price of ETH could fall to $3,132.
Ripple (XRP) Breaks Out of Downward Channel
Initially, XRP encountered a descending channel for several months, with a descending trend line connecting lower highs and lower lows. However, analysis shows that after buying interest intensified at $0.42, the altcoin exploded. This later resulted in the token rising to $0.53.
At the time of writing, the Money Flow Index (MFI) shows that there is still high demand for XRP. Therefore, it is not unreasonable to expect the price to rise to $0.55. If successful, the XRP price could reach $0.57.
Read more: 11 Cryptocurrencies to Add to Your Portfolio Before Altcoin Season
However, $0.57 is very important for the token, especially since it has been rejected multiple times at this point. If the bulls break through the resistance, Ripple could look towards $0.60. However, if there is another rejection at this point, the price could fall back to $0.52.
Overall, it seems like the altcoin season of this cycle is getting closer by the day. However, traders in the market should keep an eye on Bitcoin given that it was able to recover to $62,000.
If the BTC price continues to rise and Bitcoin dominance surges, this will nullify the altcoin price rally.
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