Altcoin Season Looms as Ethereum Price Action and Bitcoin Dominance Shift.
The potential for a new altcoin season is generating significant buzz in the crypto market, with many investors focusing on Ethereum’s price action as the leading indicator. Historically, altcoin seasons, where non-Bitcoin cryptocurrencies outperform BTC, often hinge on the performance of Ethereum (ETH).
Ethereum’s price movements are pivotal as it approaches critical support and resistance levels. Additionally, a drop in Bitcoin dominance below key levels has traditionally been a strong signal that an alt season may be imminent as investors look to diversify into altcoins.
Signs of an Altcoin Season Emerge Recent Data
Recent analyses and market data have provided strong cues that an altcoin season could be on the horizon. One of the most significant technical patterns pointing to this shift is the Inverse Head and Shoulders pattern forming on the Altcoin Season Index.
Altcoin Season Index shows a bullish Inverse Head and Shoulders pattern.
As Moustache, a crypto analyst, shared, this pattern has been developing for 3.5 years, suggesting that a major bullish reversal in favor of altcoins could soon unfold. Moreover, if the pattern’s neckline, currently sitting near 47% dominance, breaks out, it could trigger a sustained period where altcoins, led by Ethereum, outperform Bitcoin.
Furthermore, Titan of Crypto highlighted another key indicator: the Stochastic RSI in the 3-week timeframe.
Analyst highlighted that the 3-week Stochastic RSI could herald altcoin season.
The bullish crossover in this momentum oscillator has historically signaled the start of significant altcoin rallies. Moreover, the shared chart shows that previous crossovers coincided with strong moves upward for altcoins, suggesting that a similar trend may follow.
In addition, data from the altcoin market cap chart shows altcoins are consolidating near critical Fibonacci retracement levels. Furthermore, if this consolidation breaks to the upside, it could spark an altcoin rally similar to previous cycles.
Analysts believe that the recent price movements in Ethereum and other major altcoins set the stage for a major breakout, possibly marking the start of the next altcoin season.
ETH Price Forms Bullish Setup
Another cue that could help the advent of the altcoin season is the ETH USD pair forming a bullish setup, the ‘falling wedge.‘
ETH USD pair formed a bullish setup with a 101% upside target. Source: Tradingview
Two converging downward trendlines that connect lower highs and lower lows form the falling wedge, a bullish reversal. The narrowing structure shows that the bearish momentum gradually weakens, often preceding an upward breakout.
The key feature of a falling wedge is that the slope of the lower trendline is steeper than that of the upper trendline, indicating that selling pressure is dissipating. Moreover, when the breakout occurs—typically upward—it signals buyers taking control.
To estimate the potential price target after a breakout, traders measure the vertical distance between the widest points of the wedge and project that range from the breakout point upwards.
According to technical analysis rules, the ETH USD conversion rate might rally nearly 101% from its current level to reach the pattern’s projected target of around $5,230.
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