3 Signs Fueling Altcoin Breakout Season Predictions

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Overall, the cryptocurrency market enters the final days of 2023 with two months of excitement and greed. This has allowed the altcoin market cap chart to escape major accumulation territory and remain firmly entrenched at year-to-date highs.

When does altcoin season occur?

Perhaps this is a question that many traders and investors want to know. Because they’ve had a rough two years because of the downward trend.

First, the 2022 bear market pushed cryptocurrencies to all-time lows, with most altcoins down tens of percent and even many top coins down as much as 99%.

By the final days of 2023, the market began to recover, with BTC skyrocketing by 180%, while altcoins still struggled to regain their place in the 2021 uptrend.

Ethereum, the largest altcoin by market capitalization, has also recorded significant growth performance recently. However, ETH still underperforms BTC. This makes many people wonder “Is ETH dead?” And if ETH does not perform well, the entire altcoin market will continue to be depressed. Since then, altcoin season has been just a dream.

Even so, there are some signals on the charts that could be foreshadowing the upcoming altcoin season. They are related to altcoin market cap (TOTAL2), altcoin index, and even ETH price action.

Altcoin market capitalization is ready to explode

From the peak of US$1.71 trillion in November 2021 to the trough of US$427.57 billion in June 2022, the market capitalization index (TOTAL2) is in a downward trend.

From mid-2022 to November 2023, altcoins entered a long-term accumulation phase and ran in a parallel channel ranging from $494 billion (green line) to $657 billion (red line).

During this period, the key resistance level is $657 billion. Notably, the $657 billion figure continues to act as support during bull markets and resistance during accumulation periods (blue arrow). It will take until November 2023 for altcoin capitalization to overcome this resistance and leave the long-term accumulation zone.

Altcoin market cap. source: trading view

Two important technological events confirmed this breakthrough:

First, the chart creates a Long term bullish structure. After making a higher high (HH) and a lower low (HL), a second high has now occurred. This signals the beginning of a long-term uptrend.
on Monday, Altcoin trading volume. The volume broke above the descending resistance line (blue arrow). It’s worth noting that this resistance line has been in place since the mid-2021 altcoin season, so a break above it is a very bullish sign.

The next target for TOTAL2 is another long-term resistance level at $942 billion. Once achieved, we can expect a correction and confirmation of the $657 billion breakout area as support.

Additionally, additional confirmation regarding the upcoming altcoin season is Fractal structure of TOTAL2 chartrecently published by a prominent analyst @el_crypto_prof. He noted that this is the third time in the history of altcoin market capitalization that a double bottom has seen lower lows and a false breakout.

The first two occurred in 2016 and 2020, driving exponential gains and strong altcoin seasons.

TOTAL2 Chart/Source: X

Altcoin Season Index Ends Bitcoin’s Year

The second signal supporting the upcoming altcoin move is the Altcoin Seasonal Index. The index tracks the performance of altcoins relative to Bitcoin over three time periods: monthly, quarterly, and yearly. It is this indicator that implicitly signals an impending trend change.

Regarding the Altcoin Seasonal Index, analyst @el_crypto_prof highlighted that the index is repeating the fractal structure of 2020: “Altcoin Seasonal Index Shows We Are About to Leave BTC-USD Territory.”

This means that altcoins’ roughly two-year agony against Bitcoin may soon be over. If this long-term indicator performs similarly to 2020, expect a strong altcoin season in 2024.

#altcoin

Altcoin Seasonal Index Suggests We Are on the Edge of Leaving Bitcoin USD area.area.

That’s when the foundation for 100x gains is laid.

It seems to me that we haven’t seen anything yet. 🔥👀 pic.twitter.com/yjAYlgFqCE

— 𝕄𝕠𝕦𝕤𝕥𝕒𝕔ⓗ𝕖🧲 (@el_crypto_prof) December 23, 2023

Ethereum is on the verge of a strong uptrend

The final signal supporting the altcoin season is the price chart of Ethereum (ETH). Although the ETH/BTC pair is currently trading at long-term lows, this could be an ideal time to enter a long position here.

If a double bottom scenario materializes and ETH rebounds from the 0.052 BTC levels, it could quickly rebound towards the nearest resistance at 0.085 BTC. However, if this fails and Ethereum collapses, the next support level is 0.04 BTC. Reaching this level would confirm the previous 2018-2021 resistance zone.

ETH/BTC chart. source: trading view

Instead, ETH combined with USDT is forming a bullish structure, a fractal that was repeated before the last bull run. Trader @IamCryptoWolf on X pointed this out in his recent post.

ETH/USDT chart. Source:X

“The chart is self-explanatory,” he said, as it shows a structure similar to price action in the second half of 2020. If Ethereum can hold $1,935 and confirm it as a support level, then the direction of the 1-cent index growth could be initiated. If conditions from the last bull run repeat themselves, ETH could soar over the next 18 months.

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related news:

Bitcoin Dominance (BTC.D) Drops for Two Weeks in a Row: How Long Will the Altcoin Season Last?