- Alt season is well and truly underway as altcoin dominance crossed a key threshold for the first time since May 2018
- The significant break suggests that alts are starting on their road to recovery following 2018’s explosive move
- Many coins already moving, although a temporary pullback is on the cards
Alt season has officially begun after alt coin dominance broke through a more than two-year downtrend. The long awaited change in market direction, which has been kick started in traditional fashion with a TikTok-inspired DOGE run, has already seen coins moving up to 100% and has crucially seen new money enter the space. However, Bitcoin has the chance to ruin the party, so what do we need to look out for in the coming days?
Alt Season Starts With a DOGE TikTok Boom
The alt downtrend began in May 2018 and was tested and rejected in March last year, but as alts have reached oversold status there have been more recent attempts to break out. Finally, 26 months after the downtrend began, we can finally say we have broken through and alt season is upon us.
We can clearly see the difference compared to previous attempts, which have all ended in a rejection below the resistance line, and there is plenty of ground to make up. What is also different is that, unlike previous breakout attempts, there is fresh money coming into the space, in many ways thanks to the DOGE TikTok pump – over $20 billion has flowed into the space in the past five days:
It isn’t just DOGE that has been enjoying the start to the week – VET, ONE, and ADA have also seen huge growth, while LINK has hit all time highs. Bitcoin has helped by being fairly stable, which is always a key factor in any alt season – a Bitcoin volatility can crush an alt season before it has got started.
Pullback on the Cards
After all the green there has to come some red, and as our in-house analyst Will Gambit from Crypto Day Traders points out, that day could be approaching:
While we have seen major alt gains, I believe even more are on the horizon. However I do expect some type of pullback in the alt market here shortly. Bitcoin dominance is extremely oversold and the MFI is telling me it needs to release a bit upwards, perhaps for a deadcat or small bearish retest on the broken support above before heading further down.
We have already seen Bitcoin jump over $100 in the middle of the alt rally, which incidentally takes it out of the downward trend that began at the start of June:
The message therefore is that while Bitcoin may be about to put on a spurt, the odds are still in favour of more upside in the alt market, and with two years to make up for we could be in line for some serious moves.