Is Alt Season Coming?

Today (August 4th), Bitcoin dumped around $500. In past weeks, when that has happened, altcoins have dumped even harder. However, understand that this was actually a break from the norm. Usually, there had been an inverse correlation with Bitcoin & altcoins. Bitcoin goes down or sideways, altcoins went up.

But in recent weeks, altcoins have pretty much just gone down, no matter what Bitcoin has done. Bitcoin goes up, altcoins go down. Bitcoin goes sideways, altcoins go down. Bitcoin goes down, well, altcoins have gown down even harder.

While that is somewhat getting away from the point, it relates to the opening sentence & the $500 Bitcoin dump. During that dump, altcoins finally held their value, and as Bitcoin stabilizes, there has even been a slight increase.

Technical Analysis

Below is a chart of 10 altcoin cryptocurrencies, all on the Bitcoin pairing. I selected these based upon their marketcap & recent volume. They are: ETH, XRP, EOS, XLM, LTC, ADA, XMR, NEO, ETC, & BNB, It appears that there is potential for altcoins to have reached a local bottom.

Chart Interpretation

In the short-term, I am looking for this chart to climb up to the 20ema area (red line). You can see that since the 10/20ema have had their bearish cross, this ‘index’ hasn’t been able to cross the 20ema & it’s been solid resistance.

It remains to be seen what happens if & when this ‘index’ gets to the 20ema. If rejected once again, there will likely be a sharp downturn across all altcoins & further losses of at least 10-20%, if not more. However, if it crosses & closes above the 20ema, with solid volume, there could be a miniature alt run. However, it doesn’t seem like there are the right situations lining up currently for a full on alt season. Things change quickly though, and I would love to be proven wrong on that one.

I am cautiously hopeful, while keeping close watch to the 20ema. If you’re a swing trader & you’re scaling into positions at this point & you see rejection in that area, I’d suggest you take some profit.