Since the beginning of November, many Altcoins have experienced significant growth, with some even breaking free from a two-year sideways accumulation phase. This has sparked enthusiasm in the market. However, the question on everyone’s mind is, “How long will the Altcoin Season last?”
Currently, the Altcoin market capitalization for November is approaching the $700 billion USD mark, reaching a crucial resistance level.
Specifically, based on a 2-week time frame chart combined with the Super Trend indicator, the Altcoin market capitalization has been trading sideways within the range of $430 billion USD to $700 billion USD. This sideways movement has persisted from mid-2022 until now. Despite witnessing substantial gains, ranging from tens to hundreds of percent for many Altcoins in the past two weeks, a true uptrend for Altcoins has yet to emerge.
At present, the Altcoin market capitalization has risen to $650 billion USD after four consecutive green 2-week candles. This represents the most significant upward momentum since the peak of 2022. If there is further growth, the market capitalization can only increase by another 10%, reaching the strong resistance level of $700 billion USD.
Examining the price history with the Super Trend indicator reveals that the initial recovery phase following a downtrend is still insufficient to break free from resistance (similar to 2019 and 2020). When the market capitalization touches the Super Trend resistance, it is likely to experience a significant correction and take over a year to break through the resistance and establish a genuine uptrend.
Therefore, in the current FOMO (Fear of Missing Out) sentiment, traders and investors who do not already have a favorable position should exercise caution. Assuming the Altcoin market capitalization increases by another 10%, it is highly likely to face strong selling pressure at the Super Trend resistance level, similar to what happened in 2019-2020.
To gain further insights, let’s also monitor Bitcoin Dominance (BTC.D) and Tether Dominance (USDT.D).
Bitcoin Dominance (BTC.D) is at a critical support level. BTC.D represents the proportion of Bitcoin’s market capitalization within the total cryptocurrency market. When BTC.D is high, money tends to flow into Bitcoin, and conversely, when BTC.D decreases, funds tend to flow into Altcoins, creating an Altcoin Season.
Observing BTC.D fluctuations on a 3-day timeframe (3D) allows us to consider two scenarios:
- The Altcoin Season may end at the current BTC.D level of 52%, indicating that BTC.D will continue to rise to 54% or higher. At this point, capital will prioritize Bitcoin, possibly due to reasons related to the Bitcoin ETF Spot.
- The Altcoin Season may continue, corresponding to a decrease in BTC.D to 48%. In this scenario, Altcoins that have not seen significant gains may experience increases, and Altcoins currently in accumulation phases may break out. However, this could potentially be the final strong upward movement before BTC.D recovers from the 48% support level.
These two scenarios highlight critical boundaries that can help investors plan their Altcoin strategies based on the future direction of BTC.D. However, it is important to note that the analysis does not definitively predict which direction BTC.D will take.
Tether Dominance (USDT.D) serves as a warning that the Altcoin Season may be approaching its limits. USDT.D represents the proportion of Tether’s market capitalization within the cryptocurrency market. A decreasing USDT.D suggests that investors are spending more USDT to buy Bitcoin and Altcoins. Conversely, an increasing USDT.D indicates that investors are selling their assets to secure USDT.
Currently, USDT.D has dropped below 6.5%, with the potential to continue falling to around 5.7%. Historical data shows that when USDT.D decreases to 5.7%, it often signals the peak of the Altcoin market capitalization and the end of the Altcoin Season. Therefore, USDT.D implies that the current Altcoin rally, if it persists, may not last much longer.
Another sign to watch for a weakening Altcoin Season is to observe whether Low Cap Altcoins have experienced significant corrections. When even Low Cap Altcoins cease to rise, it often indicates that Mid Cap and High Cap Altcoins may follow suit in a collective downturn.