The early signs of an altcoin season are clearly visible on the altcoins/Bitcoin charts. An analyst states that Bitcoin is about to start a bottoming formation, and now the only thing left is for the altcoins to make a strong rebound. However, in such a scenario, the Bitcoin prices are recovering. So does that mean the altcoin season is not happening?
Altcoins are about to spike
Crypto netizen Michael van de Poppe spotted critical information on the Other/Bitcoin pair charts. The MACD or the Moving Average Convergence and Divergence line has turned upwards, suggesting that the altcoins are about to appreciate, while on the flip side, BTC is about to start a bottoming formation. Contrary to the analyst’s perspective, BTC prices are appreciating. However, that does not mean the altcoin season is not happening. For instance, take a look at the Altcoin Season Index (ASI).
Altcoin Season Index falls
The Altcoin Season Index, which gauges the performance of the altcoins against Bitcoin, declined from 45 last week to 39. Although the ASI has fallen, the ASI is still maintaining its uptrend of another higher low.
The ASI has two extreme ends: between 0-25 are considered the Bitcoin season, while values between 75 and 100 are considered the altcoin season. The middle range from 25-75 indicates that the market is neutral. And with 39 on the scale, the market is neutral, but it’s heading in the right direction, toward the altcoin season.
Bitcoin’s recovery
However, at the same time, Bitcoin recovered over the weekend, reaching $87K from $ 83K. Does this mean that the altcoin season won’t happen? No, not really, this is just another part of the altcoin season.
During the build-up to an altcoin season, the price of Bitcoin surges while the Bitcoin dominance crashes. The Bitcoin dominance is the representation of Bitcoin’s market cap against the rest of the crypto market.
When the altcoin season is about to kick off, new capital starts to flow into the crypto market through Bitcoin. With new capital flowing into BTC, the price surges. Later on, investors start to rotate their profits into altcoins, and then the BTC dominance crashes, as the funds flow disproportionately into altcoins. So the prices of Bitcoin rising during the build-up to an altseason is another sign of an oncoming altcoin season.
