<--- Back
Prepare for Altcoin Season
As BTC rallies off of support and looks to be setting up for an attack of the recent cycle highs, altcoins are basing, and demand is building.
The first coins to move will be the large caps, followed by the midcaps and then the low caps as the cycle tops out, likely early to middle of next year.
First let’s take a quick look at where BTC sits today…
Demand was building through June and July as the market corrected and BTC cleared out stops and filled in areas of demand. The German government selling, combined with Mt. Gox liquidations added some fuel to the fire.
We bounced strongly off the $53,500 area and have moved up over 25% in the past three weeks. BTC looks to be setting up to challenge the cycle highs at $73,775. From there, if it punches through decisively, current opinion is that we should see the $100k level or higher before this cycle ends.
While that’s a fantastic return, if the previous cycles stay true, we should see much higher levels for altcoins.
AVAX is a token that we like for this cycle. AVAX is the native token of the Avalanche blockchain. It is similar to Ethereum in that it uses smart contracts to support various blockchain projects.
Avalanche launched in 2020 and is an open-source project. This makes it accessible to anyone to contribute to the code. It is also getting attention this cycle due to its use in gaming.
The Avalanche blockchain is fast. the AVAX token is used to pay transaction processing fees, secure the network, and act as a basic unit of account among blockchains in the Avalanche network.
AVAX is currently ranked 12th in market cap amongst all coins, at $11.3B. Compare this to ETH at over $390B and you can see that there is room for AVAX to run this cycle.
Let’s take a look at the technical picture and determine some potential price targets.
You can see from the chart above that AVAX has been basing since mid-June, in the $24-$30 zone, roughly. Our oscillators are also showing that demand started building in that same mid-June period. This basing over a couple of months is a very strong indication that AVAX is setting up for a large move.
The first target is $34, which could come at any time. From there, assuming that BTC can get to it’s cycle highs, AVAX should easily test the second target area at $41.78. Once BTC breaks to new highs and starts running, the alts should really come to life and we should see AVAX test the third target area at $65.38, and if it breaks there (which I think it will) it should go much higher. I would not be surprised to see AVAX at $100 or more before the cycle tops.
You’ll know that the alt season is upon us when BTC blasts through cycle highs on its way to new all-time highs. Expect that top 20 coins to rally first, then the second tier, followed by the third tier, memes and the super microcaps.
This is the way all bull cycles play out. The big money will be made in the low cap altcoins, but that is also where the biggest risks lie. Liquidity will come fast and furious, and it will disappear just as quickly. Trade on reputable exchanges and set your sell orders ahead of time. Keep your emotions out of your trading! Go back and look at previous altcoin cycles and you’ll see how quickly the party can end.