Today I would like to show charts of the total market cap of cryptocurrencies without Bitcoin in it. I will show some interesting things, if altcoins are ready for a new season and I am going to show an interesting similarity between the total market cap excluding BTC and the Ethereum chart !
Here is a weekly chart of the total market cap excluding BTC :
You can see several interesting things in this chart. I have drawn the w-pattern with the yellow color to show that it is extremely likely we have created a double bottom already for Altcoins. A double bottom is created when price goes above the swing high failure in between the bottoms, which in this case is the 24th of June 2019 with a market cap of 141,86 billion. The market cap has moved above this level right now and thus the double bottom should have been confirmed !
I have drawn two blue horizontal lines. The thick one is the bottom and the other one is very important for Altcoins over the years. The green arrows show this, because we have seen a lot of touches of support back in 2018, resistance in 2019/2020 and right now we see once again support in September/October 2020.
The volume is increasing over the years and the indicator OBV (On Balance Volume) is rising as well, which are positive things ! Altcoins are looking good for the next years to come.
Here is another chart :
This is once again a chart of the total market cap without Bitcoin. Here I am showing a possible trajectory of Altcoins. When I look at BTC I see fear and greed index way high right now. On a daily chart of BTC we are in overbought territory for 23 days already. There are more examples to give, but I think we need some cooling down before our next leg up. When looking at the above chart, I have put the RSI (Relative Strength Index) and the CCI (Commodity Channel Index). Both are showing for now less strength, while the total market cap excluding BTC is very slightly moving higher. If the RSI and/or CCI cannot move above there last high, which I show with the green arrows, it likely means we will create some bearish divergence on the weekly and it would mean some move downwards before having our next leg up/next altseason. There is confluence here for both Bitcoin and the Altcoins to take a breather.
The yellow lines you see on the right are my prediction that I am watching like a hawk. I can see us moving downwards, creating the w-pattern once again, holding the important support level (blue line) and bouncing off of it upwards. This would actually be a really good and healthy structure, but means we would see a downwards move of about 20/30% for some Altcoins. Some people will not like this of course, but for me it will be one of the last opportunities to buy some of my favorite Altcoins at a discounted price, before next altseason will blow prices up a lot higher !
The last chart I am going to show is funnily enough a very similar chart between the total market cap excluding BTC and the chart of Ethereum !
This is the Ethereum weekly chart and look at the similarity with the charts I have shown before ! You see a double bottom, the swing-high failure in the middle of this w-pattern (look at blue horizontal line), price moving finally above it and right now holding as support and bouncing off of it (last yellow curve on the right). This is very similar to the total crypto market cap excluding BTC. This tells me that in general Altcoins like to follow what Ethereum is doing.
Altcoins over the longer run are looking very good and are getting ready for another altseason ! However in the short term I would watch out for a pullback, which should be a great opportunity to buy some of your favorite alts. Looking at indicators we can see the upwards move is losing strength (RSI, CCI, as showed before). Furthermore the fear and greed index is very high with extreme greed (87). It seems to me we need a cooling down period, reset some indicators and prepare ourselves for the next leg up ! Nothing can go straight upwards for eternity, you need pullbacks as well along the way. If BTC takes a breather I am looking for 13.8K and more likely the 12.2K/11.8K area as big support. This would mean a drop of around 15/20% from the 16K we have created so far. If this were to happen you can see Altcoins easily bleed 20/30% and for some even more ! These will be golden opportunities to buy in one last time, before we are going a lot higher !
As I am writing this article Bitcoin is moving towards 16.1K, a higher high on the daily chart. At the same time RSI, CCI and even the OBV are showing a bearish divergence in the making. Keep watching this how it plays out !
This is not financial advice and I am not a financial adviser. Do your own research and make your own decisions.