In the cryptocurrency market, there is a growing bullish momentum particularly surrounding “altcoins” as cryptocurrencies gain traction. The capitalization of all cryptocurrencies except Bitcoin (BTC) and Ethereum (ETH) has broken out of a downtrend, indicating the start of an altcoin season.
By analyzing TradingView’s TOTAL3 crypto index, which sums up the market cap of cryptocurrencies excluding BTC and ETH, it is evident that altcoins are experiencing a strong momentum, breaking free from a six-month downtrend. The TOTAL3 index, after making three lower highs following the 2024 peaks in late March, encountered significant resistance. However, on September 24, it successfully broke through this resistance after testing the downtrend line from September 21 to 23.
While Bitcoin and Ethereum are struggling within their respective downtrends, the emergence of an altseason seems probable. An altseason refers to a period in the cryptocurrency market cycle where mid and small-cap coins outshine the large caps.
There is cautious optimism regarding the potential altseason, as indicated by the first daily closure above the downtrend line by the TOTAL3 altcoins’ market cap. It is essential for the market cap to sustain above the previous resistance level and transform it into a support level.
Further boosting the altseason theory are other technical indicators, such as the nearing of the 30-day exponential moving average to the 180-day EMA, hinting at a bullish golden cross. Validation of the trend shift may occur if the monthly moving average crosses the six-month indicator upwards with increased volume.
Experts and analysts alike foresee an impending altseason. Renowned individuals like Ali Martinez and Alan Santana have highlighted signals indicating the onset of an altcoin season, particularly for mid and small-cap coins.
As the market potentially enters an altseason, investors should exercise caution due to increased price volatility, necessitating a well-thought-out investment strategy to navigate the market effectively in the weeks ahead.