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Altseason incoming? Three key indicators to watch for a potential surge

Altseason incoming Three key indicators to watch for a potential surge

Bitcoin’s (BTC) recent surge to a record high of $73,750, followed by a pullback to $61,000, has sparked discussions among cryptocurrency enthusiasts and experts about the potential onset of an ‘Altseason.’

Traditionally, Bitcoin ignites market cycles with robust surges, but the real action often unfolds during its consolidation phases, when other cryptocurrencies typically take the lead. This pattern is expected to be more pronounced due to several factors that are driving broader adoption and enhancing the valuation of altcoins.

The integration of decentralized finance (DeFi), advancements in blockchain scalability, and the expanding use of smart contracts are key factors contributing to a potential altcoin rally, which could significantly alter the dynamics of the cryptocurrency market.

Key market indicators to watch

Market analysts are closely monitoring a set of key indicators that could signal the start of an altcoin rally. 

The first of these is the exponential moving average (EMA) over 20 days which emphasizes recent price changes and is crucial for timing potential rallies. A bullish crossover in the total crypto market cap’s EMA20 suggests that a rally might be imminent.

Another critical indicator is the Stochastic RSI, which assesses the strength and weakness of the Relative Strength Indicator (RSI) over a set period. A bullish crossing in this metric suggests that altcoins might be gearing up for significant price movements.

If the total crypto market cap “retests” the EMA20 while also “crossing bullish” on the Stochastic RSI, it could lead to a ‘rally time’ according to the pseudonymous crypto trader Titan of Crypto.

Furthermore, Bitcoin’s market share, measured by Bitcoin dominance, provides insights into overall investor sentiment and risk appetite. 

Currently, Bitcoin’s dominance stands at 52.92%. A decline in this figure could signal a shift in investor interest towards altcoins, potentially marking the start of an altseason. 

This comes alongside the total altcoin market cap — which excludes the top 10 cryptocurrencies — declining 17.55% over the past 30 days to $266.47 billion, as per the data from TradingView

Despite the decline, the market is still holding above the $250 billion support level, suggesting it is positioning itself for a future upward movement, highlighted trader Rekt Capital.

Expert predictions and market sentiments

Expert opinions on the potential for an altseason are mixed, with some analysts predicting the onset of the biggest altseason possibly reaching a $4 trillion market cap.

However, other analysts, such as Benjamin Cowen, have noted that the current market conditions are not strongly indicative of an imminent altseason, suggesting that Bitcoin may continue to dominate the markets for a longer period. 

This sentiment is echoed by the Altcoin Season Index by Blockchain Center, which declares an altseason if 75% of the top 50 coins outperform Bitcoin over the last 90 days.

Altcoin Season Index . Source: Blockchain Center.

The index shows that only 41% of the top 50 altcoins have outperformed Bitcoin over the last 90 days. As the index is below 75, it suggests that it is not yet officially altcoin season, providing a more cautious perspective amid the enthusiastic forecast.

While there are promising signs of an upcoming altseason, the cryptocurrency market remains inherently unpredictable. 

Investors should remain vigilant, staying informed about market trends and changes. It is crucial to thoroughly investigate and analyze altcoin projects when building investment positions to maximize potential gains while effectively managing risks.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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