Altcoin Season Flash Bottom Signals, So Why Does Bearish Pressure Persist?

Key Insights

• Altcoin season could be unfolding, as the ultimate bottom signal for altcoins has just occurred.
• The trend remained unclear, but ETH/BTC moving higher was a positive sign. Altcoins against Bitcoin broke out, and they were showing early signs of positive response.
• The top 50 performers over the last 3 months show altcoins are still bearish.

The latest data on crypto, especially altcoins, seemed to yield contradictory projections. Crypto rebounded strongly over the past 24 hours as the market continued to rally following the Jane Street lawsuit.

Ethereum, the largest-cap altcoin, led this resurgence, bouncing back above $2,000. This triggered a market-wide resurgence in altcoins, even though they had been red over the past 90 days.

Interestingly, the technical outlook was leaning bullish, though returns showed that bearish pressure persisted. This raises the question of whether altcoins have truly reached their lowest point.

Altcoin Season Prediction: Is the Bottom in Sight for Altcoins?

To begin with, historical data on the altcoin market cap relative to the total crypto market cap suggested a potential bottom. This signal was reminiscent of the 2014, 2018, and 2022 bottoms, which were characterized by oversold RSI readings. The RSI reading across all these periods was 24, suggesting market exhaustion.

According to the chart, the post-2014 and 2018 bottoms produced the largest altcoin season, while that of 2022 was just modest. The chart has printed the same signal, and Moustache predicts it will only go up.

Some users on X disagreed with this prediction, as they noted the signal had failed a couple of times. However, if it is repeated, then altcoins could rally from this bottom. Today’s market reaction, especially for altcoins, hinted at such potential.

Altcoins/Bitcoin Breaking Out Signals Trend Shift

Looking at the Ethereum/Bitcoin valuation, the chart supported an upward move. When ETH/BTC rallies to the upside, altcoins tend to follow suit.

The daily chart of ETH/BTC dipped below the 0.03250 BTC support zone, which indicated Bitcoin was outperforming Ethereum.

Following weeks of consolidation, the pair has bounced above the small range formed below this area. This showed that ETH was gaining strength against BTC, but only reclaiming the 0.03250 BTC level would guarantee continuation.

Expanding the analysis to altcoins/Bitcoin, the pair had just broken out of a massive falling wedge pattern that started in 2022. As per analyst Javon Marks, this breakout was showing a positive response.

The analyst added that these could be the last phase of an altcoin cycle. Hence, the move could be parabolic if today’s strength in altcoins remained.

The two charts signaled a possible trend shift in alts. However, this development should not be relied upon, as performance metrics indicated the persistence of bear pressure.

Top 50 Performers Over Last 3 Months: Why Sell Pressure Persists

Only six coins were in the green over the last three months when assessing the performance of all crypto assets, including gold from PAX and Tether. These six coins included four altcoins, PAXG and XAUT.

These altcoins were Canton Network (CC) at 104% returns, Sky Protocol (SKY) previously MakerDAO at 37%, and Rain Protocol (RAIN) at 31.7%. MemeCore (M) rounded up the list with just 4.4%, as both gold tokens gained over 20%. The rest were deep in the reds, indicating existing sell pressure.

Even the resurgence this week was not enough to erase these losses. This is because the crypto market, like other sectors, remained fearful. Hence, buying was very minimal. Additionally, the whales have been dumping alongside institutions like BlackRock during the bear market.

Altogether, the altcoin season was shaping up technically, but returns showed traders were still selling their tokens.

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