Altcoin Season Faces Risks as Worrying Chart Patterns Emerge

This week, the Altcoin Season Index continues its downward trend, with Bitcoin's dominance accelerating higher.

The index tracks the performance of altcoins relative to Bitcoin( $BTC ), falling to 15, the lowest level this year. As most altcoins remain in loss, this downward trend persists.

Data shows that only a few cryptocurrencies have gained in the past 90 days. Pippin token surged over 2,300%, making it the best-performing major token. Other notable gains include$ZEC , Dash, Monero, and Merlin Chain.

On the other hand, tokens like DoubleZero, Story, MYX Finance, Immutable, and Pudgy Penguins declined over 60% during this period, making them the worst performers.

These altcoins underperform the overall market, as the Crypto Fear & Greed Index drops into the fear zone at 25. Meanwhile, investors continue to reduce leverage, evidenced by a decrease in open interest contracts.

After the October 10 event, deleveraging accelerated, with over 1.6 million traders facing$20 billion in liquidations. This liquidation reduced demand for altcoins, as they are considered riskier than Bitcoin.

Notably, as Bitcoin continues to decline, the Altcoin Season Index also drops. Historically, when Bitcoin falls, altcoins tend to experience even sharper declines.

Altcoin Season May Face Risks as Double Top Pattern Forms

The three-day chart shows that the total market capitalization of all coins except Bitcoin and Ethereum has fallen from $1.19 trillion in October to$825 billion.

Due to the formation of a double top pattern, market cap may face greater downside risk, with the double top at $1.16 trillion and the neckline at$658 billion. Additionally, the market cap has broken below the 38.2% Fibonacci retracement level.

Market cap has also fallen below the 50-day and 200-day exponential moving averages, indicating that the bears still hold control. Meanwhile, the Relative Strength Index and MACD have been trending downward over the past few months.

Therefore, the most likely outlook is for altcoins to continue declining, with the seller’s target at the 50% retracement level of$739 billion. If this level is broken, further downside could push prices toward the neckline at $658 billion.