Altcoin enthusiasts have seen a lot of pain in 2022. Not only has the price of BTC dropped drastically over the past 10 months, but the valuation of most altcoins against Bitcoin also strongly collapsed.
Everyone is asking the question: When is the 2022 altcoin season? In today’s analysis, BeInCrypto addresses this issue by looking at the altcoin market cap chart, altcoin season indicators, and the valuation of ETH versus BTC. As a result, it looks like the worst period for altcoins may be over, and the market is on the verge of a massive altcoin season in 2022.
TOTAL2 starts pulse up
If we look at the market cap chart of the altcoin (TOTAL2), we see that it has only generated green candles for the past 6 weeks. This likely means that we are currently in the first wave of upward momentum, which started with a low of $427.5 billion on June 18, 2022. So far, the market capitalization of altcoins has increased by nearly by 60%, reaching a peak of $693 billion.
However, prior to that, altcoins, like the BTC market, experienced a sharp decline from the all-time high (ATH) of $1.7 trillion on November 10, 2021. Since then, the altcoin index has fallen along a descending resistance line (blue) and has been repeatedly rejected by it (red circles).
Then, in March, TOTAL2 broke out of this line (green arrow), suggesting that the 2022 altcoin season had begun. The rise did not last long, however, as just three weeks later the index hit a local high at $1.27 trillion and began an accelerated decline.
This led to the aforementioned June low being reached. This time the blue resistance line turned into support (R/S reversal) and had already been validated twice. However, before that, there was a significant breakdown of the long-term support line, which had been in place since February 2021 (orange line and arrow).
Currently, the line should act as resistance and currently sits at around $1.05 trillion. Moreover, it is close to the 0.5 Fib retracement level, measured for the entire decline of the ATH.
Cryptocurrency market analyst @StockmoneyL tweeted a 5-day chart from TOTAL2. It compares the fractals of the current altcoin market and the period 2018-2021 between them. The analyst points to the analogous structure, which in the coming weeks could lead to strong increases and a booming altcoin season in 2022. Interestingly, if the fractal were to repeat, the nearest resistance would be around 1 trillion dollars.
The Altcoin 2022 season has already started!
The analysis of the altcoin market cap chart and the similarities with the previous cycle are not the only reasons for the continued price increases of the altcoin. According BlockchainCenter datathe 2022 altcoin season has just started.
Their daily updated altcoin season chart indicates that the index entered altcoin dominance territory in early August. As we read on their website:
“If 75% of the top 50 coins have performed better than Bitcoin in the last season (90 days), that’s Altcoin season.”
On August 10th, the altcoin seasonal index they created registered a near maximum value of 98. These levels have not been seen since April-June 2021. So if the index remains above of the value of 75 for the next few weeks, we could experience a strong 2022 altcoin season in the near future.
In addition, the site publishes an overview of the TOP 50 cryptocurrencies of the last 90 days and compares them with the evolution of the price of Bitcoin. It turns out that BTC lost -20.2% in the current season, while most altcoins saw increases or lost less.
Among the leaders are CEL (342%), ETC (109%), UNI (71%) and LINK (20%). Additionally, some of the biggest projects were ahead of Bitcoin, even though they saw declines, such as ADA (-3.1%), ETH (-5.5%) and XRP (-12.6%).
Ethereum leaves Bitcoin behind
Another indicator of a potential altcoin season in 2022 is the performance of Ethereum (ETH), which is the largest altcoin, against BTC. The Ethereum technical analysis against the USD indicates that there has been a dynamic rise in the price of ETH in recent weeks. Moreover, it is possible that the IRS broke through the long-term resistance line and may continue to rise up to the $2100 level.
If we now take a look at the relationship with BTC, the weekly chart offers an even more bullish outlook. ETH/BTC is up from the low at 0.05 BTC, which previously served as resistance. The validation of this zone was a bullish signal that initiated the current rise.
Currently, ETH is at 0.081 BTC, up 66% from the aforementioned low. Additionally, this week’s large green candle led to a break above the resistance zone at 0.075 BTC (red line), which had previously repeatedly rejected the price (blue arrows).
Technical indicators confirm the initiation of an uptrend. The RSI broke above both the descending resistance line (blue) and the 50 level. Meanwhile, the MACD recently made a bullish crossover and is generating higher and higher bars of momentum at the rise. All these developments are strong signals for the continuation of the bullish momentum.
Cryptocurrency analyst @el_crypto_prof drew a monthly chart of ETH/BTC, in which he suggests that we are on the verge of a significant increase in Ethereum’s valuation against Bitcoin. He pointed to parallels in the fractals of historical bullish waves, stating that today’s price action corresponds to the time frame of early 2017 (orange ellipses).
According to his prediction, ETH could see a 379% rise from the low in the coming months and reach 0.25 BTC. If this were indeed to be the case, the rise of Ethereum would be a powerful catalyst for the 2022 altcoin season.
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