Altcoin bells are jingling 🎄🎁

Compass 157

In our latest playbook, we highlighted the following as crucial:

Bitcoin dominance is offering clues (of a Bitcoin Rally or Altcoin Spike). After peaking at 60%, dominance has dropped and now pulled back to 58%. This suggests that if Bitcoin consolidates while dominance declines, one more strong pump in Altcoins may be on the horizon.

If Bitcoin remains range-bound, Santa’s sleigh might carry a few select Altcoins ready for a rally, even if the ranging is sub-$100K.

We observed how, at the beginning of the week, Altcoins outperformed Bitcoin (now in that sub-100K range, trading at $94.3K), signaling what could be the year-end rally. Let’s review what is aligning to make this happen.

Silent Night.

• Those who saw Bitcoin print a new all-time high at $108K a week ago and felt FOMO, thinking the price was escaping them, are now likely feeling FUD as the price retests the $92K support.

• The truth is that Bitcoin is in a technically attractive zone, though it’s also at a much higher price than we thought possible just a few months ago. The year-end seasonal period, with low volume and interest, might be marking an accumulation zone before the next bullish leg.

• But that’s not all. This could also be the prelude to an accumulation phase for Altcoins, where the next thing we see is Bitcoin rising while its dominance declines, and Altcoins climbing exponentially, resuming the Altcoin Season.

• But is this feasible? Let’s examine the factors aligning.

Speedometers indicating the current state of BTC. The full dot represents the current reading and the white dot represents one week ago.

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Back in the Neutral Zone… for Good.

• Market sentiment has cooled, shifting from a state of extreme greed to a nearly neutral stance. If this isn’t your first rodeo in the markets or your first Bitcoin cycle, you know what it means when sentiment cools from extreme greed to neutrality in a bullish trend. Let’s break it down.

Fear & Greed Index.

• Bitcoin had already signaled that a potential correction was on the way. Just a week ago, Bitcoin hit its all-time high at $108k and began a corrective path that lasted nearly a week. This has also contributed to a correction in sentiment, which, combined with the low trading volume typical of this period, creates a bearish feeling mixed with a sense of anticipation.

• When sentiment corrects during a bullish trend, it’s often a strong indicator that the bottom of the price correction has already occurred. The more neutral the sentiment, the greater the potential for accumulation in the price correction zone. So far, the price has corrected by 16% (from $108k to $93k), which is normal during a Bitcoin bull run. Corrections of up to 30% are also a possibility.

• What would happen in the case of a 30% correction (which would align with the $74k zone, the previous all-time high)? In that scenario, we would likely see sentiment turn deeply bearish, marking a key accumulation zone for the ongoing bull run.

CMC Fear & Greed Index.

Altcoin Season Resumes After Dominance Falls, Right?

• The Bitcoin-Altcoin Cycle indicator shows we are entering a Bitcoin Season. Does this mean the Altcoin Season is over?