The allure of altcoins and their incredible returns when crypto is bullish keeps investors buying the high beta assets. This comes with higher levels of risk and volatility.
The altcoin market appears to be possibly be ready for final capitulation, and variety of charts could support this idea. The technicals range from reversal signals in Bitcoin dominance to cyclical timing of troughs in Ethereum. Most importantly, signs point to this happening in August.
TD Sequential buy setup appears| BTC.D on TradingView.com
Pinpointing Trend Turns With TD Sequential
The first notable technical indicator that suggests a change in the altcoin market’s trajectory is a TD9 sell setup in Bitcoin Dominance on the 1M TD Sequential.
“Perfected” setups only are confirmed with a higher high or higher low, depending on the direction of the sequence. This leaves room for one more high in BTC.D during August, before a larger reversal between the relationship in Bitcoin and altcoins.
Altcoins match past BTC bear markets | BTC.D on TradingView.com
Timing Tool Lines Up Miraculously With Altcoin Market Cap Chart
The comparison above shows the total altcoin market versus Bitcoin circa 2013 through 2015. After a peak in November, altcoins bottomed 59 bars later in December. Compare this to Bitcoin’s November 2013 peak and January 2015 bottom, and the timeline matches precisely.
Although the price action in between is different, altcoins could be heading for a double-bottom type situation during August. This happened 32 weekly bars later in BTCUSD, which would line up flawlessly with the first or second week of August.
Ether heads for cycle low against Bitcoin | ETHBTC on TradingView.com
Ethereum Versus Bitcoin Climax Coming Within Two Months?
Last but not least, we have a zoomed out look at the cyclical behavior in ETHBTC. If the path of corrective behavior continues to form with cyclical accuracy, a bottom should be put in between Ethereum and Bitcoin in the coming two months.
Bitcoin outperforming Ether can happen for two reasons: Bitcoin rising while altcoins remain relatively stable, or altcoins crashing harder than Bitcoin. We’ve seen plenty of both all this year, and it might not be over yet. But when it is over, it should be time to favor altcoins again.
Charts and entire excerpts originally appeared in Issue #15 of CoinChartist (VIP). Subscribe for free.