Bitcoin is trading a few thousand above its previous high of $ 20,000, but the spark of a new altcoin season has yet to hit the crypto industry. One reason for the lag in the uptrend is that the total capitalization of the altcoin market has got stuck in the clouds.
But once the clouds and associated turbulence clears, there will be no resistance in the atmosphere preventing the rest of the asset class from catching up and taking off Bitcoin towards the moon.
Bitcoin FOMO is making a return to the crypto market, but the top alts have not been affected so far
Bitcoin was the very first cryptocurrency to be created and anything that came after that that is not a direct offshoot of the crypto asset is considered an altcoin.
Even Ethereum or XRP, which themselves have a large percentage of the total crypto market capitalization, are still classified in the altcoin class.
When Bitcoin first exploded into the mainstream in 2017, the FOMO and the associated flood of capital pouring into the crypto market in search of the next big thing resulted in what has been dubbed “altcoin season” to this day.
Related reading | Start of the altcoin season: active Ethereum addresses visit the “DeFi Summer” highs again
During this phase, Ethereum rose to $ 1,400, XRP rose to over $ 3.58 per token, and the rest of the altcoin space did just as well – if not better.
With Bitcoin now trading well above its all-time high, crypto investment veterans have expected another altcoin season of similar proportions, which is still pending. And that’s because the total capitalization of the altcoin market can’t get your head out of the clouds.
Altcoins get stuck in the Ichimoku cloud, but a bullish crossover has formed | Source: CRYPTOCAP-TOTAL2 on TradingView.com
Why Another Altcoin Season Or Bear Market Will Decide This Month
According to the total crypto market cap excluding Bitcoin, which just looks at the remaining over $ 200 billion in capital that Altcoins bring to the table, the price action on monthly timeframes has been rejected at the Ichimoku Cloud Resistance.
The Ichimoku Cloud, also called Kumo, can act as a support or resistance, and the size of each cloud indicates how turbulent the price movement has been, much like the Bollinger Bands expand with volatility.
And while falling headlong into cloud resistance is not a good sign for altcoins, the December monthly candle has so far been holding above the cloud’s lower support. Bitcoin dominance also shows a very important December close that coincides with the overall altcoin cap.
The big November candle pushed altcoins into the cloud, more importantly, triggered a bullish crossover of the baseline and the conversion line of the indicator, also called Tenkan-Sen and Kijun-Sen.
A declining crossover is also shown on the graph above to demonstrate the importance of the trend change that occurs alongside the crossover when confirmed.
The Ichimoku looks at past, current, and future price action, and the red cloud lasting another year could indicate a prolonged period of bearish price action.
Here’s why crypto investors drool during the alternate season | Source: CRYPTOCAP-TOTAL2 on TradingView.com
However, if all of the altcoin market cap can break above the cloud, the graph directly above serves as an example of what a proper altcoin season can do for investor returns.
Related reading | Bitcoin Dominance In December: Why The Future Of Altcoins Depends On The End Of The Month
Given the negative sentiment among many of these assets and the institutional focus solely on Bitcoin, there is no telling whether altcoins will ever hit their previous all-time highs again.
So before there is a chance at the moon, altcoin holders must wish a star that the entire crypto market capitalization can finally rise above the clouds without Bitcoin.
Featured image from deposit photos, charts from TradingView.com