Altcoin Season on the Horizon?

After Bitcoin's (BTC/USDT) failed assault on $100K and a correction to the $90K+ zone, the market buzz is building for another attempt at six figures.

After Bitcoin’s (BTC/USDT) failed attempt to breach the $100K resistance and a subsequent correction to the $90K+ zone, market chatter suggests that the next move could be a collective assault on six figures.

This narrative is further supported by the surging Altcoin Season Index (ASI), which reached 61 on Thanksgiving Day, inching closer to the magical 75+ mark that signals a full-blown altseason. With the potential for a Santa Rally looming, could this Thanksgiving become even sweeter if altcoins steal the spotlight?

However, before we get carried away, let's not forget the importance of making rational decisions and avoiding emotional biases in the markets. To time this transition properly and ensure a successful altcoin rotation, we turn to three critical charts:

Chart 1: BTC Dominance (BTC.D) - Weekly

Bitcoin dominance on the weekly timeframe is at a critical juncture within a rising channel, with three key levels dictating the narrative:

BTC.D has been making lower highs since May 2024, indicating weaker Bitcoin performance.

The 40-42 zone has acted as strong support throughout 2024, with any breach opening the door to lower levels.

Conversely, a sustained bounce from this support could indicate a continuation of Bitcoin outperformance.

What to Watch:

A sustained BTC.D drop below 40% on increasing volume would signal altcoin strength. Conversely, a strong rebound from this level indicates continued Bitcoin outperformance. Chart 2: ETH/BTC – Daily

Ethereum vs. Bitcoin provides a critical lens into altcoin strength, and the pair has shown signs of life, attempting to break out of a descending channel after months of underperformance. Key observations:

ETH/BTC has been trading within this channel since August 2024, with three failed breakout attempts.

A recent bullish engulfing candle on high volume could signal a successful breakout.

If the pair sustains above the channel resistance, it could pave the way for further gains.

What to Watch:

A sustained ETH/BTC close above 0.082-0.083 with increasing momentum would indicate altcoin strength. Conversely, a failure at this level suggests a continuation of Bitcoin outperformance. Chart 3: TOTAL2 – Weekly

The TOTAL2 chart, tracking the total market cap of altcoins excluding Bitcoin, is perhaps the cleanest setup of all. It recently broke out of a massive three-year Cup & Handle (C&H) pattern, signaling long-term bullish potential.

After forming the "cup" from May 2022 to March 2023, followed by the "handle" throughout 2024, the breakout occurred in late November.

This breakout indicates a shift in the macro trend for altcoins, suggesting the potential for a sustained altcoin rally.

Why It Matters:

This setup, combined with weakening Bitcoin dominance and a potential ETH/BTC reversal, could set the stage for a promising altseason. It's like a self-fulfilling prophecy—if everyone expects an altseason, their actions (buying altcoins) will contribute to making it happen.

Conclusion: Is Altseason and Santa Rally Incoming?

The setup for an altseason looks increasingly promising. BTC dominance flirts with critical support, ETH/BTC eyes a reversal, and TOTAL2 has confirmed a major bullish breakout. Combine these with the potential for a Santa Rally, and the stage could be set for a spectacular finish to 2024.

That said, as the classic trading wisdom goes: "Confirmation is key." Acting on one chart alone is reckless; when all three align, the probabilities for a successful altcoin rotation increase dramatically.

For those celebrating Thanksgiving, enjoy the holiday—just don’t overindulge, whether it's on turkey or early altcoin shopping. Stay patient, stay disciplined, and let the charts guide your next moves.