SSR Signals the Upcoming Altcoin Season: On-Chain Analysis

In as we speak’s on-chain evaluation, BeInCrypto compares the Stablecoin Supply Ratio (SSR) and its oscillator to the altcoin market capitalization chart. The aim is to attempt to decide whether or not to count on the arrival of the first altcoin season in 2022.

In as we speak’s on-chain evaluation, BeInCrypto compares the Stablecoin Supply Ratio (SSR) and its oscillator to the altcoin market capitalization chart. The aim is to attempt to decide whether or not to count on the arrival of the first altcoin season in 2022.

If you have a look at the charts of WAVES, which pumped 285% in 16 days, or LUNA, which simply set a brand new ATH, it looks as if these are the first harbingers of this yr’s altcoin season. However, regardless of these exceptions, most altcoins are in a long-term downtrend – in opposition to each USD and BTC.

Nevertheless, the chart of altcoin market capitalization (TOTAL2) is approaching a long-term, rising line of help. A bounce from it might provoke a development reversal and the begin of a brand new altcoin season. Moreover, the Stablecoin Supply Ratio supplies indicators that after a interval of Bitcoin consolidation, capital could quickly circulate into riskier altcoins.

Long-term help and resistance for TOTAL2

The TOTAL2 chart has been in a downtrend since the all-time excessive (ATH) of $1.07 trillion set on November 10, 2021. Since then, the value has adopted a descending resistance line that has rejected each breakout try at the least 6 instances (crimson circles). The correction has now lasted 122 days and TOTAL2 has declined by 43% reaching $971 billion as we speak.

On the different hand, the decline has led to a affirmation of the rising help line once more, which has been in place since February 2021. Previously, this line served as help in June and July 2021. A bounce from it led to the aforementioned ATH. In complete, this line has already been validated as help 4 instances (inexperienced circles).

Cryptocurrency dealer @CryptoPoseidonn tweeted a chart of TOTAL2, indicating a potential main breakout. He compares the summer time 2021 correction with the present scenario. The dealer expects {that a} breakout of the falling resistance line, adopted by its validation as help, will result in a brand new altcoin season.

A complimentary look is supplied by a chart of the altcoin season indicator, recurrently up to date by BlockchainCenter. The indicator was not too long ago round the worth of 25, which is interpreted as a Bitcoin season. During this era, altcoins lose in opposition to BTC and most frequently in opposition to USD as effectively.

The earlier two events (highlighted) when the chart fell beneath 25 occurred between November 2020-January 2021 and July-August 2021. These correlate with intervals when TOTAL2 was experiencing a correction (if BTC was falling) or a sideways development (if BTC was rising). However, in each instances, a return to larger values above 25 was a sign for a serious altcoin season.

SSR indicators the begin of altcoin season

One of the main on-chain analysts @Negentropic_ has linked the risk of the arrival of altcoin season to the Stablecoin Supply Ratio (SSR) oscillator. In a double chart posted on Twitter, he illustrates the optimistic correlation between the two charts. The analyst states:

“More stablecoins transformed to #Bitcoin as the value consolidates. Once the rally begins, cash will circulate to riskier altcoins.”

On the SSR oscillator chart from Glassnode, we do certainly see an ascending help line that goes again to the crash of the COVID-19 pandemic in March 2020. Each faucet of this help line correlated with a backside in the Bitcoin value.

This help additionally marked the peak factors of money circulate into risk-off belongings. Investors then recovered and opened again as much as risk-on belongings, resulting in a brand new altcoin season.

The fundamental SSR chart, which we lined at BeInCrypto again in January, supplies an identical sign. For greater than two months, the SSR chart has been consolidating close to the decrease 200-day Bollinger band. Historically, this space has been a interval of fine shopping for alternatives, after which Bitcoin and altcoin costs have risen quickly (inexperienced areas).

BeInCrypto’s newest Bitcoin (BTC) evaluation, click on right here.

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