Altcoins
Altcoin Season Hopes Are Revived by These 3 Leading Altcoins
Just a few days ago, only six of the top 50 altcoins had surpassed Bitcoin (BTC). But today, that changed, fueling fresh speculation about an altcoin season.
The interesting part of this development is not only the addition of three new cryptocurrencies, but also the fact that the new entrants are all in the top ten by market capitalization. Including: Solana (SOL), Ethereum (ETH) and Ripple (XRP).
Is the rotation into altcoins high risk and high reward?
It is important to note that altcoin season begins when at least 75% of non-Bitcoin cryptocurrencies outperform BTC. However, only nine do so, meaning that the period of altcoin dominance has yet to be confirmed.
As mentioned above, the performance of SOL, ETH, and XRP is increasing market confidence. Glassnode founders Jan Happel, Rafael Schultze-Kraft, and Yann Allemann also echo this statement.
Using their joint Negentropic X account, the founders of the on-chain analytics platform, noticed that rotation of capital towards riskier activities could soon debut on the cryptocurrency market.
First, they compared changes in the traditional market and used them as a cue for potential changes in the cryptocurrency market.
“Will we see this on BTC and Alts too? Well, in November 2020 we had a day just like yesterday. IWM skyrocketed and continued to rise for the next few months. This was the starting signal for the strongest part of the Alt-rally for the next 4 months, as Total3 rallied about 400% in just 4 months. Will we see the same thing again? Will the rotation create a massive rally in Alts? We think it could very well happen!” Negentropic published July 12th.
Furthermore, the entry of Solana, Ripple and Ethereum into the group can be linked to their price performance.
Over the past seven days, SOL price has increased by 9.31%, ETH has jumped by 9.56%, and XRP has seen a surprising gain with a whopping 21.97% increase.
Here’s how cryptocurrencies could fare as the long-awaited altcoin season approaches.
Solana (SOL) eyes higher prices after 9% surge
The current daily chart of SOL/USD shows that the altcoin has formed a symmetrical triangle. This chart pattern is characterized by converging trend lines connecting a series of lower highs and higher lows.
The lower highs act as resistance, while the higher lows act as support. Also, the price of SOL is trying to break out of the triangle. If this happens, Solana will break out of the consolidation phase and head for a massive breakout.
Additionally, the Fibonacci Retracement indicator identifies potential resistance and support points for the token. As seen in the chart below, SOL could rise towards $162.79 in the coming days.
To know more: What is Altcoin Season? A Complete Guide
Solana Daily Analysis. Source: Trading View
Here is where the 0.618 Fibonacci positions are located. If successful, this can lead the altcoin price to retest $174.59. However, in case of a pullback, the SOL price can retrace its steps to $135.97.
Ethereum (ETH) breaks key resistance, set at $3,622
At press time, ETH is trading at $3,360. The price is also trading above the 20-day EMA (blue). EMA stands for Exponential Moving Average and measures changes in the direction of the price over a period of time.
If the EMA is above the price, it means the trend is bearish. But since ETH changes hands above the 20 EMA, it implies the trend is bullish. Also, the Relative Strength Index (RSI) supports this prejudice.
The RSI measures momentum, and since it is above the neutral line, it means that the bulls are in control of ETH’s movement. Evidence of this is the break of the resistance at $3,255 and the defense at $2,946.
If the momentum remains bullish and the excitement around the Ethereum ETF Spot Launch persist, the price could reach $3,622. However, if selling pressure comes into play, ETH price could drop to $3,132.
Ripple (XRP) Breaks Out of Descending Channel
Initially, XRP encountered a multi-month descending channel, with downtrend lines connecting lower highs and lower lows. However, analysis shows that altcoin exploded after buying interest intensified to $0.42. This later led to the token rising to $0.53.
At press time, the Money Flow Index (MFI) reveals that there remains a high demand for XRP. Therefore, it is not out of place to expect a price increase to $0.55. If successful, the price of XRP could reach $0.57.
To know more: 11 Cryptocurrencies to Add to Your Portfolio Before Altcoin Season
However, $0.57 is crucial for the coin, especially since it has been rejected several times at this point. If the bulls break the resistance, Ripple can look towards $0.60. However, another rejection at this point could force the price to return to $0.52.
All in all, it seems like the altcoin season for this cycle is getting closer by the day. However, market traders need to keep an eye on Bitcoin, considering it was able to recover $62,000.
If the price of BTC continues to increase and Bitcoin Dominance jumps, this will invalidate an altcoin price increase.
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