- Alt Season is one of the most financially beneficial points in the crypto cycle
- Alts run after Bitcoin has settled down after a big move, but it doesn’t last forever
- How can you tell when an alt season is over?
Timing the end of a market cycle is the secret to trading on all time frames, particularly so in an alt season. You don’t want to have stacked a whole load of BTC through alt coins only to lose it because you mistime the move back into BTC. but how can you tell when an alt season is coming to an end and it’s time for Bitcoin to take center stage again?
Bitcoin Dominance Key to Alt Season
When trying to determine the end of a market cycle, what you’re looking for is a particular candle or pair of candles that usually defines the end of that cycle. Naturally the candles will look different depending whether you are looking for the end of a bull or bear market, but the principle is the same. In terms of an alt season we are looking for a bottoming candle on the Bitcoin dominance level.
Bottoming candles are typified by having a long trailing wick and come after a period of downwards movement. The long trailing wick is indicative that this price has proved tempting to buyers who have stepped in and driven the price back up, setting up a reversal:
The other type of bottoming candle we can look for is called a tweezer bottom. Tweezer bottoms are two adjacent candles that again occur after a downtrend and share the same low point:
As we can see, in both instances these candle combinations precipitated an upwards movement. When it comes to alt seasons in the past, by looking at the Bitcoin dominance chart we can see many examples of these reversal candles:
On each of these cases these candles were followed by Bitcoin reclaiming its dominance over alts having experienced a period of downtrend – these circles are the points where you should have flipped alts back into BTC.
When we add in the support/resistance lines that accompany these movements we can see very clearly where such reversals should have been expected:
By using a combination of support/resistance lines with bottoming candles then it is in fact quite easy to spot when an alt season might be about to end and a Bitcoin cycle could be about to begin, at which point you should consider scaling back into BTC while you wait for confirmation of the uptrend.
