An alt season (altcoin season) is something that virtually all crypto traders look forward to. It is a time where all cryptocurrencies other than bitcoin exponentially grow in value. From large caps to small caps, these digital coins can rise anywhere by 2x to 100x. If you’re finding the previous statement difficult to believe, that’s likely because you were not around the last time these crypto tokens pumped.
A crypto trader who goes by ‘Crypto Hedge ‘ on YouTube has a reason for that. In a series of tweets, the analyst revealed why there hasn’t been an alt season in nearly two years and why we’re due for one soon.
One of the tenets of technical analysis is that history tends to repeat itself. What happened in the past is very likely to happen again. We’re seeing this principle play out in the chart of the total altcoin market cap thanks to Crypto Hedge.
According to the trader, the total market cap has been trading perfectly within an ascending channel. Since 2014, the altcoin index has bounced every single time it touched the diagonal support of the channel. It has also plunged every time it tapped the diagonal resistance of the channel. In a span of six years, the index has respected both the support and resistance levels of the ascending channel five times.
The trader emphasized that the total altcoin market cap is touching the diagonal support of the ascending channel. He feels confident that an alt season will happen soon because the index has followed the pattern five out of five times.
Crypto Hedge validates his argument by illustrating how the bitcoin dominance index is showing signs of weakness. For those who are not aware, the index computes the market capitalization of bitcoin against the market cap of all cryptocurrencies. According to the analyst, the bitcoin dominance index getting rebuffed at 69 percent is an indication that the total altcoin market cap will be skyrocketing soon.
As of this writing, the bitcoin dominance index has dropped to 65.73 percent as bitcoin struggles to trade above $10,000 levels. A look at the index also shows bullish exhaustion. It is overbought in both the weekly and daily RSI. On top of that, the index is flashing a bearish divergence on the daily RSI to indicate weakening bullish momentum.
As the bitcoin dominance index shows weakness while the total altcoin market cap touches the diagonal support of its ascending channel, we now have a confluence of events where altcoins are due for a massive rally. That’s according to Crypto Hedge.
Crypto Hedge is offering a convincing argument of how crypto tokens other than bitcoin are almost ready for blastoff. It is hard to deny that a bounce for altcoins is on the horizon considering that the diagonal support of the horizon has been respected multiple times. On top of that, bitcoin is starting to lose steam. It is very possible that people will transfer capital into other cryptocurrencies to protect their profits and overall crypto exposure.
Editor’s Note: The article has been updated with credit to the original analyst.