Bitcoin is trading a few thousand above its previous high of $ 20,000, but the spark of a new altcoin season hasn’t yet hit the crypto industry. One reason the bullish advance has been delayed is because all of the altcoin market cap has got stuck in the clouds.
Once the clouds and associated turbulence are gone, there will be no resistance in the atmosphere preventing the rest of the asset class from catching up to Bitcoin and heading towards the moon.
Bitcoin FOMO is making a return to the crypto market, but top alts have not been affected so far
Bitcoin was the first cryptocurrency to be created and anything that came after the fact that it was not a direct diversion of the crypto asset is considered an altcoin.
Even Ethereum or XRP, which have a large share of the total crypto market capitalization, continue to be assigned to the altcoin class.
When Bitcoin first exploded into the mainstream in 2017, the FOMO and the associated flood of capital pouring into the crypto market in search of the next big thing led to what is still referred to as “altcoin season” to this day.
Related reading | Prelude to the altcoin season: active Ethereum addresses revisit the ‘DeFi Summer’ highs
During this phase, Ethereum soared to $ 1,400, XRP soared above $ 3.58 per token, and the rest of the altcoin space did just as well – if not better.
With Bitcoin trading well above its all-time high, crypto-investing vets have expected another altcoin season of similar proportions, but that has yet to be done. And that’s because all of the altcoin market cap can’t come out of the clouds.
Altcoins get stuck in the Ichimoku cloud, but a bullish crossover has formed Source: CRYPTOCAP-TOTAL2 on TradingView.com
Why another altcoin season or bear market will be decided this month
According to total crypto market cap excluding Bitcoin, the price action for monthly timeframes has been rejected due to Ichimoku cloud resistance, given just the remaining over $ 200 billion in capital that Altcoins bring to the table.
The Ichimoku Cloud, also called Kumo, can act as support or resistance, and the size of each cloud indicates how turbulent the price movement has been, much like the Bollinger Bands expanding with volatility.
And although it’s not a good sign for altcoins to get headlong into cloud resistance, the monthly December candle has so far been hanging over the lower support of the cloud. The Bitcoin dominance also shows a very important December close that coincides with the overall altcoin cap.
The big November candle pushed altcoins into the cloud, more importantly, triggered a bullish crossover of the indicator’s baseline and conversion line, also known as Tenkan-Sen and Kijun-Sen.
A declining crossover is also shown in the graphic above to demonstrate the importance of the trend change that occurs next to the crossover when confirmed.
The Ichimoku deals with past, current, and future price moves, and the red cloud lasting another year could indicate a prolonged period of bearish price action.
Here’s why crypto investors have been salivating all season Source: CRYPTOCAP-TOTAL2 on TradingView.com
However, if the total altcoin market cap can break above the cloud, the graph directly above is an example of what a proper altcoin season can bring to investor returns.
Related reading | Bitcoin Dominance In December: Why The Future Of Altcoins Hangs At The End Of This Month
Given the negative sentiment surrounding many of these assets and the institutional focus on Bitcoin alone, there is no telling whether altcoins will ever hit their previous highs again.
Before every chance at a moon, altcoin holders have to wish a star that the entire crypto market capitalization can finally get above the clouds without Bitcoin.
Featured image from deposit photos, charts from TradingView.com