The cryptocurrency market has been dominated by Bitcoin (BTC) for much of 2024. However, a recent analysis suggests altcoins could be poised for a significant upswing. On Crypto Banter’s Dylan’s Trading Show, an analyst laid out the conditions for a potential altcoin season, highlighting specific coins with promising technical setups.
Market Dominance: Key Indicator for Altcoins
The analyst emphasized the importance of monitoring market dominance, which refers to Bitcoin’s share of the total cryptocurrency market capitalization. A declining dominance level historically precedes strong altcoin performance. The analyst pointed towards a downtrend in dominance characterized by lower highs, with a further drop to around 54% being the ideal scenario.
Technical Breakout Hinges on Bitcoin and Ethereum
The analyst envisions a perfect storm for altcoins: a continued decline in dominance leading into the Consumer Price Index (CPI) announcement, followed by a sharp recovery in Bitcoin dominance. This scenario, he argues, could trigger a bullish breakout in altcoins, potentially leading to new price highs. However, the analyst cautioned against “dead coins like XRP and ADA,” suggesting they might not participate in the potential rally.
Solana (SOL): Crucial Support Level
Specific altcoins were also analyzed. For Solana (SOL), the analyst identified a critical support zone between $137 and $139. Maintaining this level is crucial; a breakdown could signal a deeper decline below the 200-day moving average (MA), the 382 Fibonacci retracement level, and key horizontal support levels. Such a scenario would be unfavorable for SOL.
Ethereum (ETH): 200-Day MA in Focus
Ethereum’s (ETH) price action mirrored Bitcoin’s recent rejection at the 200-day MA. The analyst is closely watching ETH’s approach to this level on the 3-day chart, as a breakout and hold above this resistance could significantly impact the broader altcoin market. The analyst has set price targets of $3350 and $3500 for ETH if this bullish scenario unfolds.
Spotlight on Specific Altcoins: Fantom, Stacks, and Bonk
The analyst emphasized the importance of a bullish breakout followed by a successful retest for various altcoins. Such a pattern could trigger a significant price increase. Conversely, a rejection at resistance could lead to further losses for altcoins.
PEPE: The analyst expects PEPE to mirror Ethereum’s price movement if ETH becomes particularly aggressive. The strategy involves waiting for a breakout in ETH before entering PEPE.
Bonk: Similar to ETH, Bonk is currently facing resistance at a critical zone. The analyst will monitor for a pullback to the 382 Fibonacci level, especially considering the upcoming CPI data.
Fantom (FTM): A recent price pump and retracement in FTM has brought a major resistance level into focus. The analyst anticipates a potential bullish move if overall market sentiment improves, with key entry points around $0.45 and $0.42.
Stacks (STX): STX has been defying the downtrend and exhibiting signs of a bullish pullback. The analyst suggests an entry point around $1.437 with stops to mitigate potential weakness towards the 618 Fibonacci level.