Has Altcoin Season Finally Started? | Credit: Hameem Sarwar
- The Bitcoin Dominance Rate (BTCD) might have reached its top.
- Altcoin’s Market Cap (ALTCAP) is nearing its all-time high.
- The USDT Dominance broke down from a parallel channel.
The Bitcoin price increased rapidly at the start of November, reaching an all-time high of $99,588 on Nov. 22.
While some altcoins, such as SOL and PEPE, have reached new all-time highs, the altcoin market cap and Ethereum have not.
This underperformance has led to the anticipation that altcoins will eventually catch up and begin a period of outperformance known as altcoin season. Some signs suggest this will be the case.
Below, we will analyze three key charts that can predict whether the altseason will begin.
BTCD Begins Correction
The BTCD chart from the weekly time frame shows an ongoing five-wave upward movement since September 2022. The upward movement led to a high of 61.53% last week, slightly above the 0.618 Fibonacci retracement resistance level.
This seemingly caused a breakout from an ascending wedge pattern that existed for over a year.
However, the price action has been bearish since then. BTCD deviated (black circle) above the ascending wedge and fell back inside. Also, the Bitcoin Dominance is creating its second consecutive bearish weekly candlestick.
If BTCD breaks down from the wedge, it could decline to the closest support at 52%.
The wave count indicates the wedge is the fifth and final wave in the upward movement. The sub-wave count is in black, showing a completed ending diagonal. Therefore, the price action and wave count suggest the top is in place.
In addition, technical indicators are bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) have generated bearish divergences and are falling. Also, the MACD has just made a bearish cross.
So, the Bitcoin Dominance Rate may have started its correction, coinciding with the beginning of altcoin season.
What Analysts are Saying
Sentiment on X has gradually started to turn toward an altcoin rally.
Analyst Intuitio believes the next big Bitcoin decline will be the last one before altseason starts. After that, the market will turn into “easy mode”, and you can buy every pullback safely. He warns traders not to fall into a false sense of security and fail to take profits during the upward movement.
Even though BTC has fallen since Nov. 22, IncomeSharks suggests the market is healthy since ETH is holding strong during this time.
AltStreetBets believes this will continue since the ETH/BTC chart has nearly reached its bottom. Arndxt also believes ETH/BTC is bottoming, and he suggests ETFs will begin to catch up with Bitcoin, powering the ETH rally.
Previous Binance CEO CZ said that while he is not against memes, the current trend of meme coins is getting out of hand, and blockchain should return to its roots of building real applications.
On top of these, one of the main reasons traders are bullish is the altcoin market cap. Crypto Rover notes the similarities between the current movement and 2020. He suggests the current breakout will lead to a parabolic rally, confirming that altcoin season has started.
Jelle noted that the altcoin market cap had turned the final horizontal resistance area into support, paving the way for a rapid price increase. Finally, Mikybull suggests that altseason will begin in December and continue until March 2025.
Let’s look at the altcoin market cap and see what awaits in December and beyond.
ALTCAP Approaches Highs
The Altcoin market cap increased by over 50% in November, breaking from a long-term descending parallel channel. The wave count suggests that the breakout is part of the fifth and final wave in this upward movement (white), which started in January 2023.
The sub-wave count is black, implying that ALTCAP is in sub-wave three. This is often the most rapid portion of the upward movement, explaining the three successive bullish weekly candlesticks.
A likely target for the top of the upward movement is between $2.14-$2.19 trillion. The target is found by the 2.61 external Fibonacci retracement of wave four (black) and by giving wave five the same length as waves one and three combined.
Technical indicators support this increase. The RSI and MACD are increasing and above 50 and 0, respectively. So, the bullish Altcoin Market Cap charts align with the bearish BTCD one, predicting an impending altcoin season.
USDT Dominance Falls
Finally, the USDT dominance chart is bearish. USDT dominance fell sharply in November after breaking down from an ascending parallel channel. The chart is approaching its yearly lows at 3.79%.
The USDT dominance also fell below the 4.75% horizontal support area during the decline.
If the downward movement continues, USDT could fall to 2.80%, a level not reached since 2021, during the previous altcoin season. The RSI and MACD are both falling and in bearish territory. Even though a potential bullish divergence is developing, it has not been confirmed yet.
As a result, these three charts all align and suggest that altcoin season will soon begin or has already begun.
Altcoin Season Begins
The Bitcoin DOminance, USDT Dominance, and Altcoin market cap charts align. The former two are bearish, while the latter is bullish.
This suggests a period when Bitcoin’s price increases but its dominance falls, causing altcoins to outperform it.
