Comparing the Stablecoin Supply Ratio with its oscillator to the altcoin market capitalization chart will give us an expectation as to when we can expect to see the arrival of the first altcoin season in 2022.
If we look at the chart of WAVES, which has jumped by more than 285% in 6 days it seems like the harbingers of the first altcoin season are already upon us.
Despite these exceptions, it seems like most altcoins are in a long-term downtrend against both USD and BTC. However, the chart of altcoin market capitalization is approaching a long term, rising line of support. A pump from it could initiate a trend reversal and the start of a new altcoin season(opinion).
The SSR signals that after a period of Bitcoin consolidation capital may soon flow into riskier altcoins.
Long term support and resistance for TOTAL2. The TOTAL2 chart has been in a downtrend since the all-time high of $1.07 Trillion set on November 10, 2021.
The price has since then been following a resistance line that has rejected very breakout attempt at least 6 times (red circles).
The correction has now lasted 1122 days and TOTAL2 has declined by 43% reaching $971 Billion today.
On the other hand, the decline has led to a confirmation of the rising support line again which has been in place since February 2021. This has previously served as support in June and July 2021. A bounce from it led to the enforcement ATH. In total this one has already been validated as support 4 times(green circles).
Source: TOTAL2 Index Charts and Quotes — TradingView
A complimentary look is provided by a chart of the altcoin season indicator regularly updated by BlockchainCenter. The indicator was recently around the value of 25 which is interpreted as a Bitcoin Season. During this period altcoins lose against BTC and most often against USD as well.
Source: Altcoin Season Index: Is it Altseason right now?
The previous two occasions(highlighted) when the cart fell below 5 occurred between November 2020-January 2021and July-August 2021. These correlate with periods when TOTAL2 was experiencing a correction(BTC was falling) or sideways trend(BTC was rising.).However, in both cases, a return to higher values above 25 was a signal for a major altcoin season.
We see is an ascending support line that goes back to the crash of the COVID 19 pandemic in March 2020. Each tap of this support line correlated with a bottom in the Bitcoin’sprice.
This support also marked the peak season of cash flow into risk-off assets. Investors then recovered and opened back up to risk-on assets, leading to a new altcoin season.
The basic SSR chart provides a similar signal. For about two months the SSRchart has been consolidating near the lower 200 day Bollinger band. In the past, this area has been a time of good buying opportunities after which Bitcoin and altcoin prices have risen rapidly(green areas).
Conclusion
The chart of altcoin market cap has reached a long-term rising line of support. A breakthrough in the 122-day resistance could lead to a new altcoin season. The SSR oscillator and Bitcoin’s consolidation give a signal for altcoin upside momentum.
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