When is altcoin season? This is the question many traders and investors are asking themselves as we face many challenges over the past two years. First, the deep bear market of 2022 has pushed their preferred cryptocurrency to multi-year lows. Afterwards, when Bitcoin (BTC) soared 180% in 2023, altcoin fans had to look with envy.
At the same time, Ethereum (ETH), the largest altcoin by market capitalization, recently hit its lowest level in 18 months compared to Bitcoin. Because of this, some wonder if ETH is dead. And if ETH doesn’t do well, the entire altcoin market will continue to retreat. Does this mean the next altcoin season will remain a dream?
Nonetheless, there are signs on several charts that point to the upcoming altcoin season. This has to do with altcoin market capitalization (TOTAL2), altcoin indices, and even ETH price action itself.
Altcoin market capitalization ready to break through
From a high of $1.71 trillion in November 2021 to a low of $427.57 billion in June 2022, the market capitalization index (TOTAL2) showed a downward trend. Then, from mid-2022 to November 2023, altcoins were in a long-term accumulation phase. This ran in parallel channels with a range between $494 billion (green line) and $657 billion (red line).
The key resistance level during this period remained at $657 billion, which repeatedly served as support during bull market periods and resistance during accumulation periods (blue arrow). It was not until November 2023 that the altcoin market cap broke this resistance and broke out of its long-term accumulation range.
This breakthrough is confirmed by two important technical events. First, the chart indicated a bullish long-term structure. After creating a higher high (HH) and a higher low (HL), the second highest high has now emerged. This signals the beginning of a long-term upward trend.
Additionally, the breakout is confirmed by the altcoin trading volume that breaks above the downward resistance line (blue arrow). This resistance line has been around since the mid-2021 altcoin season, so breaking it is a very bullish sign.
TOTAL2’s next target is another long-term resistance level at $942 billion. Once there, support can be expected to correct and validate the $657 billion breakout zone.
Additionally, further confirmation of the upcoming altcoin season is the fractal structure of the TOTAL2 chart recently published by a renowned analyst. @el_crypto_prof. He pointed out that this is only the third time in history that altcoin capitalization has created a double bottom with higher lows and false breakouts.
The previous two occurred in 2016 and 2020. In both cases, there were exponential upward movements and strong altcoin seasons afterwards.
Altcoin Season Index Ends Bitcoin Year
The second signal supporting the upcoming altcoin movement is the well-known altcoin season index. This index monitors the performance of altcoins against Bitcoin at three intervals: monthly, quarterly, and annually. And it is the latter that signals an imminent trend change.
The aforementioned analyst @el_crypto_prof said: Another tweet from him The indicator is repeating the fractal structure of 2020. He wrote:
“Altcoin seasonal indices show we are on the verge of leaving the $BTC zone.”
This means that the hardships of altcoins compared to Bitcoin, which have lasted for about two years, may soon end. If these long-term indicators behave similarly as they did in 2020, we can expect a strong altcoin season in 2024.
Ethereum on the verge of a strong upward trend
Lastly, the final sign of altcoin season is the price chart of Ethereum (ETH) itself. Despite the fact that the ETH/BTC pair is currently at a long-term low, now may be an ideal time to take a long position here.
If a double bottom scenario plays out and ETH rebounds from the 0.052 BTC level, it could quickly surge towards the nearest resistance of 0.085 BTC. However, if this fails and Ethereum collapses, the next support will be at the 0.04 BTC level. Reaching this level would validate the previous 2018-2021 resistance area.
In contrast, ETH paired with USDT is in the process of forming a bullish structure that repeats the fractal just before the previous bull market. This is what trader X pointed out. @IamCryptoWolf From his recent post.
According to him, “Charts are self-explanatory.” This is because it shows a similar structure to the price movement in the second half of 2020. If Ethereum maintains the $1935 level and verifies it as support, an exponential upward movement could occur. It has begun. If previous bull market scenarios repeat, ETH could experience a surge over the next 18 months.
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