Smart traders often use these three indicators to determine when altcoin season might start.
It is widely accepted that the fate of the cryptocurrency market is largely dependent on the performance of bitcoin (BTC), which means such times for crypto traders who choose to invest in altcoins.
When the price of BTC drops, altcoins tend to follow, but when the bottoming process begins, altcoins tend to rise during bitcoin consolidation stages, and this usually leads to a call for altcoin season. While Bitcoin’s current plunge below $30,000 shows that it’s a bit premature to start altcoin season, analysts are still seeing a lot of mixed results pointing to altcoin season. Let’s see.
ETH/BTC price action could be a leading indicator
A look at the possibility of an altcoin season using an ETH/BTC chart as an indicator was discussed by an analyst and Twitter user under the pseudonym PlanDeFi, who posted the following chart comparing ETH/BTC performance from 2016 to 2017 with the pair. 2021-2022
ETH/BTC 2016/2017 compared to ETH/BTC 2021/2022. Source: Twitter
“Looks pretty damn similar, doesn’t it? Accumulation>Breakout>Uplink>Breakout. The market is bigger now – it just takes longer.”
According to the forecast provided, the next off-season could start any time after the start of July and could last until the end of 2022.
2017 fractal suggests alternate season is imminent
Further evidence that the market is nearing a turning point comes from El_Crypto_Prof who posted the chart below showing the altcoin market cap history.
Market capitalization of altcoins. Source: Twitter
“In regards to altcoins, I see the following scenario. Too much in common with the previous cycle. The RSI also looks incredible. The next wave will leave many behind.”
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The market has firmly entered the “bitcoin season”.
Although fractals are pleasing to the eye and provide hope to disgruntled traders, most of them do not materialize and are not accurate analytical methods that can be relied upon when trading.
The altseason indicator offers a more metric-based way of predicting when the market will have “bitcoin season” and “altcoin season”.
Altseason indicator. Source: Blockchain Center
According to the chart above, it is unlikely that Altseason will appear anytime soon, as the metric currently reads 24 and the level required to indicate Altseason is 75.
Judging by the performance of the index to date, it took at least two to three months to move from a range indicating bitcoin season to altcoin season levels. According to the indicator, current forecasts suggest that the altcoin season may not start until August or September 2022 at the earliest.
The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.