In the cryptocurrency market, the rise of altcoins signals a growing bullish momentum, separate from Bitcoin and Ethereum. The total capitalization of altcoins, excluding BTC and ETH, has broken out of a downtrend, marking the beginning of an altseason.
The TOTAL3 crypto index by TradingView, which sums up the market cap of all cryptocurrencies except the top two, has reached a $614.64 billion capitalization, indicating a strong momentum as it emerges from a six-month downward trend. Despite facing resistance with three consecutive lower highs since late March, the index finally broke through on September 24 after testing the downtrend line.
As Bitcoin and Ethereum struggle within their downtrends, the possibility of an altseason emerging is being considered. An altseason is a phase in the market cycle where mid and small-cap coins outperform large caps significantly.
There is optimism surrounding the altseason speculation, with the need for caution and validation regarding the recent uptrend in the altcoin market cap. Technical indicators, such as the nearing bullish golden cross of the 30-day EMA and 180-day EMA, support the idea of an altseason. Confirmation of the trend shift may occur with the monthly moving average crossing the six-month indicator upwards alongside increased trading volume.
Renowned analysts and trading experts predict the onset of an altseason. Ali Martinez anticipates an altcoin season approaching, based on the break out of the downtrend in the “crypto total market cap excluding top 10.” Additionally, Alan Santana expresses a positive bias towards mid and small-caps while maintaining a bearish view on Bitcoin, Ethereum, and other popular coins due to the potential for smaller altcoins to flourish at this time.
With an altseason on the horizon, investors are advised to approach the market with caution and consider the potential for increased price volatility and associated risks with short-term speculation. Building a resilient portfolio and having a sound strategy will be crucial for navigating the market during this period of expected altcoin growth.