Altcoin season brews as a bullish trading pattern forecasts an explosive price move

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Bitcoin (BTC) price has struggled to hold on to crucial support at $64,800 a few days after completing its fourth halving on April 20.

Meanwhile, altcoins, led by memecoins and layer 1 cryptocurrencies, have outperformed BTC over the last week, leaving market participants wondering whether the altcoin season (altseason) is here.

Altcoin season — or “altseason” — typically refers to a crypto market phase where altcoins, surge in value to often outperform BTC.

On April 24, trader and analyst Moustache observed that TOTAL2 – the altcoin total market cap excluding BTC, had completed the ABC-correction phases of the Wyckoff-Method and was in the middle of a breakout.

Crypto investors have been eagerly waiting for altcoins to start moving higher because they provide higher risk-to-reward returns.

Altcoin market capitalization. Source: Moustache

In an earlier X post on April 23, the analyst observed that TOTAL2 had escaped from a falling wedge on the monthly chart, repeating a similar setup seen during the 2020 to2021 market cycle.

Source: Moustache

While also looking at TOTAL2, entrepreneur and crypto investor Lark Davis observed that the altcoin market cap had reclaimed key support provided by the 50-day exponential moving average.

Related: Technical charts suggest a roaring altseason may be just ahead: Analysts

Although this crucial support has since been lost at the Wall Street open on April 24, a bullish cross from the moving average convergence divergence (MACD) indicator suggested that the altcoins were ready for a move higher.

Davis said,

“With a bullish MACD crossover, it could be on the brink of something big.”

Altcoin market capitalization. Source: TradingView

However, it’s not time to celebrate yet. Following highs in mid-March, most altcoins have corrected. BTC remains 12% below its all-time high above $73,800, with the flash crash on April 24 threatening to take it below the $65,000 level.

Analyst Daan Crypto Trades said the sentiment toward altcoins is “pretty low,” adding, “People are getting pessimistic about ever seeing an altseason at all.”

The performance of the altcoins seemingly coincides with a decline in the altcoin season index by Blockchain Center, indicating that the altcoin season is not yet here. According to this index:

“If 75% of the top 50 coins performed better than Bitcoin over the last season (90 days), it is Altcoin Season.”

Performance of top 50 cryptocurrencies over the last 90 days. Source: Blockchain Center

This indicator demonstrates that only 41% of the leading 50 altcoins have outperformed Bitcoin in the last 90 days. Since the index is less than 75, it indicates that it is not yet altcoin season.