Indications of a Bullish Altcoin Season
Cryptocurrency traders are increasingly optimistic as several indicators hint at a bullish trend for altcoins, suggesting that an “up-only season” may be approaching. Despite Bitcoin’s current dominance in the market, analysts are identifying key metrics and chart patterns that could signify a favorable period for altcoins.
Altcoin Season Index: A Bullish Shift?
One notable analysis comes from the pseudonymous trader, Moustache, who discussed a promising pattern forming on the Altcoin Season Index in a post published on October 11. He shared the emergence of an inverse head-and-shoulders (IH&S) chart pattern on the index, which tracks altcoin performance relative to Bitcoin. This specific pattern has been slowly developing for over 3.5 years and is typically interpreted as a bullish signal.
An inverse head-and-shoulders pattern suggests a potential end to a market downtrend, signaling that the selling pressure is abating and buyers are starting to assert their dominance. Should this play out as anticipated, it could indicate that Bitcoin’s influence is waning, allowing smaller cryptocurrencies to take the spotlight—a scenario commonly referred to as “altcoin season.”
Current Status of Altcoin Season Index
Despite the positive signals, the Altcoin Season Index currently stands at 39%, according to Blockchaincenter, which monitors these trends. This percentage indicates that only 39% of the top 50 cryptocurrencies by market capitalization have outperformed Bitcoin over the last 90 days. For a full-scale altcoin season to be officially recognized, this figure needs to climb to at least 75%.
The Power of the Stochastic RSI
In addition to the Altcoin Season Index, analysts are closely monitoring the stochastic relative strength index (RSI) for further bullish signs. Titan of Crypto, an independent analyst, observed that this momentum oscillator has produced a bullish crossover on the three-week chart. Such a crossover occurs when the stochastic RSI moves above its signal line, suggesting that a bullish trend is imminent.
Historically, these bullish crossovers have preceded significant upward movements in altcoins, raising hope among traders about the potential for a major rally in the coming period.
Market Capitalization Trends: The Recovery of TOTAL3
The overall recovery in altcoins is also being reflected in the broader cryptocurrency market, specifically in the market capitalization metric known as TOTAL3, which measures the total capitalization of cryptocurrencies, excluding Bitcoin and Ether. Recent data reveals that TOTAL3 has seen a substantial increase of 19%, climbing from a low of $516.7 billion in early September to a high of $617.8 billion in early October.
Although there has been a slight dip, TOTAL3 remains above crucial support levels. Traders have begun taking profits as the RSI on the daily chart neared overbought territory—indicating a short-term overvaluation of altcoins. Nonetheless, the RSI has since rebounded, suggesting that the overall market conditions still favor an ongoing uptrend for altcoins.
Outlook: Is Altcoin Season on the Horizon?
If TOTAL3 manages to maintain its position above key resistance zones, analysts believe that the recovery of altcoins could continue. With the possibility of an exciting altcoin season on the horizon, traders and investors may soon reap the rewards of their patience and strategic positioning during more challenging market periods.