According to crypto traders, many altcoins are currently displaying some “bullish patterns” that, if they play out as expected, could soon see the market enter an “up-only season. "
“Altcoin Season Index has been forming one of the most bullish patterns for 3.5 years,” pseudonymous analyst Moustache declared in an Oct. 11 post on X.
The analyst was referring to an inverse head-and-shoulders (IH&S) chart pattern that had formed on Blockchaincenter’s Altcoin Season Index chart between 2022 and 2024.
An inverse head-and-shoulders pattern is a bullish indicator that signals the downtrend is easing, and buyers are becoming more dominant in the market. This means that Bitcoin’s (BTC) dominance could be waning, and altcoins could begin to outperform, signaling the start of an altcoin season.
“Up only season is near, in my opinion,” Moustache added.
Altcoin season index forms IH&S pattern. Source: Moustache
Although the index has been recovering, it currently stands at 39, meaning only 39% of the top 50 cryptocurrencies by market capitalization have outperformed Bitcoin over the last 90 days, according to Blockchaincenter. This falls short of the 75% level required to declare an altcoin season.
Meanwhile, the stochastic RSI — a momentum oscillator that measures the relative position of the RSI within its range over a specific period — has produced a bullish crossover on the three-week chart, which independent analyst Titan of Crypto claims is a signal that “a major #Alts rally could be just around the corner.”
A bullish crossover occurs when the Stochastic RSI crosses above its signal line, indicating a potential upward trend.
“Typically, when a bullish crossover forms on the 3-week Stochastic RSI, a powerful move to the upside follows.”
Stochastic RSI produces a bullish cross. Source: Titan of Crypto
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Altcoin total market cap begins to look bullish
The ongoing recovery in altcoins is part of a rebound in TOTAL3—the total market cap of all cryptocurrencies excluding Bitcoin (BTC) and Ether (ETH)—that began on Sept. 6.
Data from Cointelegraph Markets Pro and TradingView shows that TOTAL2 has increased by 19% from a low of $516.7 billion on Sept. 6 to a high of $617.8 billion on Oct. 7, before retracing to the current value of $601.5 billion. This uptick has seen TOTAL3 rise above a key support zone stretching from $589 billion to $596 billion as shown on the daily chart below.
Note that all the major moving averages, including the 50-day exponential moving average (EMA), the 100-day EMA and the 200-day EMA, sit within this demand zone.
Traders booked profits as the relative strength index (RSI) on the daily chart reached near overbought conditions at 69 on Sept. 30, suggesting that the altcoins were becoming overvalued.
Total crypto market cap excluding BTC. Source: TradingView
Altcoins are still pursuing the uptrend as they remain above the ascending trendline. The movement of the RSI from 45 to 53 over the last three days suggests that the market conditions favor the upside.
If TOTAL3 holds above the major resistance zone mentioned above, altcoins could continue their recovery, and a sustained recovery could signal the beginning of the much-awaited altseason.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.