Cryptocurrency traders and analysts are optimistic about the potential for a bullish trend in altcoins, indicating the beginning of an “up-only season.” Key metrics and chart patterns are aligning to forecast a strong period for altcoins, despite Bitcoin’s current dominance in the market. Analysts have pointed to the formation of a bullish pattern on the Altcoin Season Index, specifically highlighting an inverse head-and-shoulders (IH&S) chart pattern that has been developing over the past 3.5 years. This pattern is often seen as a bullish signal, suggesting that the market may be preparing for a significant shift where smaller cryptocurrencies can outperform Bitcoin, known as an “altcoin season.”
However, despite the optimistic indicators, the Altcoin Season Index currently stands at 39, according to Blockchaincenter, indicating that only 39% of the top 50 cryptocurrencies by market capitalization have outperformed Bitcoin in the last 90 days. To declare a full-fledged altcoin season, this figure needs to rise to 75%. Additionally, analysts are closely watching the stochastic relative strength index (RSI), which has shown a bullish crossover on the three-week chart. This signal, according to analyst Titan of Crypto, could precede a major rally for altcoins, as historically such crossovers have led to powerful upward moves.
The ongoing recovery in altcoins is also evident in the broader market capitalization of cryptocurrencies excluding Bitcoin and Ether, referred to as TOTAL3. Data from TradingView shows that the market cap for TOTAL3 has increased by 19% from early September to a recent high in early October, signaling a positive trend. Despite a slight pullback and profit-taking by traders as the RSI on the daily chart approached overbought levels, the RSI has since rebounded, indicating that market conditions still favor an uptrend for altcoins. If TOTAL3 continues to hold above key support zones, analysts predict that altcoins could see further recovery, potentially leading to the much-anticipated altseason.
Overall, the sentiment among cryptocurrency traders is optimistic about the potential for altcoins to outperform in the near future. Key indicators such as the IH&S pattern on the Altcoin Season Index, the stochastic RSI crossover, and the market capitalization of TOTAL3 all point towards a bullish trend for altcoins. While the Altcoin Season Index currently stands at 39, there is anticipation for it to reach 75% to declare a full altcoin season. If the market conditions continue to favor altcoins and TOTAL3 maintains its support levels, analysts believe that an altseason could be on the horizon, marking a period where smaller cryptocurrencies may shine.
