The much-anticipated altcoin season may not happen soon, with technical analysis suggesting a more resilient crypto market crash. CMC data show that the Altcoin Season Index has dropped to 16, and this trend may continue.
Altcoin Market Cap Has Formed Bearish Technicals
One way to predict whether an altcoin season will occur is to conduct technical analysis of the market capitalization of all cryptocurrencies, excluding Bitcoin, Ethereum, and stablecoins.
The chart below shows that this market cap peaked at $974 billion earlier this year and then plunged to the current $550 billion. It has crashed below the 50-week Exponential Moving Average (EMA), confirming the bearish outlook.
Most importantly, the valuation has formed a double-top pattern at $913 billion and a neckline at $451 billion, its lowest level in April when Donald Trump announced his “reciprocal tariffs”.
A double-top pattern is made up of two peaks and a neckline, which, in this case, is at $451. It often leads to further downside, as it signals that bulls are afraid to place bids above the upper level.
Meanwhile, the Relative Strength Index (RSI) and the MACD indicators have continued to move downward over the past few months.
Therefore, the most likely scenario is that it continues to fall, with the next key target to watch at $451 billion. This target is about 19% below the current level. A move below the neckline will point to more downside in the coming months.
Altcoin Season at Risk as Ethereum Price Forms Bearish Technicals
Another reason the atcoin season may not happen any time soon is that some of the top altcoins have formed bearish chart patterns.
This Solana price prediction found that the coin has formed a giant head-and-shoulders pattern, which is a common bearish reversal sign. Similarly, the DOGE price forecast pointed to more risky chart patterns.
Ethereum, the biggest altcoin, has also formed numerous bearish patterns. The daily chart below shows that the token has remained below all moving averages and the Supertrend indicators.
It has also formed a bearish pennant and a head-and-shoulders chart pattern. Historically, these patterns have led to more downside over time.
There are other reasons why the altcoin season may not happen soon. One factor is that investors are feeling fear, as evidenced by the Crypto Fear and Greed Index remaining below 30 this year. In most cases, investors dump altcoins whenever there is fear in the market.
An altcoin season typically happens when Bitcoin is in a strong bull run. However, as we warned in this BTC prediction, it has formed numerous bearish patterns, including a rising wedge on the weekly chart and a bearish pennant on the daily chart.
Therefore, the coin will likely continue to fall in the near term, a move that will drag other altcoins down.
