Original author: Nancy Lubale
Original title: 3 key metrics point to ‘up only season’ in altcoins — Analysts
Original source: Cointelegraph
Compiled by: Koala, Mars Finance
The cryptocurrency market is recovering from this week’s brutal sell-off, and analysts say three key indicators suggest altcoin season could be around the corner.
According to a cryptocurrency trader, many altcoins are currently showing some “bullish patterns” and if they develop as expected, the market will soon enter a “bull season.”
“The Altcoin Seasonal Index has been forming one of the most bullish patterns in 3.5 years,” anonymous analyst Moustache declared in an Oct. 11 post on X.
The analyst is referring to the Inverted Head and Shoulders (IH&S) chart pattern that formed between 2022 and 2024 on Blockchaincenter’s Altcoin Seasonal Index chart.
The inverted head and shoulders pattern is a bullish signal that the downtrend is easing and buyers are becoming more dominant in the market. This means that Bitcoin (BTC) dominance may be waning and altcoins may start to outperform Bitcoin, heralding the arrival of the altcoin season.
“I think the upswing season is coming,” Moustache added.
Altcoin Seasonal Index forms IH&S pattern. Source: Moustache
According to Blockchaincenter, although the index has been recovering, it currently stands at 39, meaning that only 39% of the top 50 cryptocurrencies by market cap have outperformed Bitcoin over the past 90 days. This is below the 75% level required to declare an altcoin season.
Meanwhile, the Stochastic RSI (a momentum oscillator that measures the relative position of the RSI within its range over a specific period) produced a bullish crossover on the three-week chart, with independent analyst Titan of Crypto claiming this is a signal that “a major rally in#Altscould be around the corner.”
A bullish crossover occurs when the Stochastic RSI indicator crosses above its signal line, indicating a potential uptrend.
“Usually, when the 3-week stochastic RSI forms a bullish crossover, a strong upside move is expected.”
Stochastic RSI produces a bullish crossover. Source: Titan of Crypto
Altcoin market capitalization starts to rise
The ongoing recovery in altcoins is part of a rally in TOTAL3 — the combined market capitalization of all cryptocurrencies excluding Bitcoin (BTC) and Ethereum (ETH) — that began on September 6.
Data from Cointelegraph Markets Pro and TradingView show that TOTAL2 rose from a low of $516.7 billion on September 6 to a high of $617.8 billion on October 7, a 19% increase, before retreating to its current level of $601.5 billion. As shown in the daily chart below, this rise has seen TOTAL3 break through a key support area, rising from $589 billion to $596 billion.
Note that all major moving averages, including the 50-day exponential moving average (EMA), 100-day EMA, and 200-day EMA, are located within this demand zone.
Traders booked profits as the relative strength index (RSI) on the daily chart reached 69, close to overbought conditions, on September 30, indicating that altcoins were overvalued.
Total cryptocurrency market capitalization excluding BTC. Source: TradingView
The altcoin is still following an uptrend as it remains above the uptrend line. The RSI has increased from 45 to 53 in the past three days, which shows that market conditions are favorable for gains.
If TOTAL3 remains above the aforementioned major resistance zone, the altcoin may continue to rally, and a sustained rally could signal the start of the much-anticipated altcoin season.
