Altcoin season is in jeopardy as an alarming chart pattern emerges

The Altcoin Season Index continued its downward trend this week as Bitcoin’s dominance accelerated.

The index, which tracks the performance of altcoins against Bitcoin (BTC), fell to 15, the lowest level this year. This decline continued as most altcoins remained in the red.

Data collected by CoinMarketCap shows that only a handful of cryptocurrencies have risen over the past 90 days. The Pippin token has risen by over 2,300%, making it the best performing major tokens. The other notable winners were privacy names like Zcash, Dash, Monero and Merlin Chain.

On the other hand, tokens like DoubleZero, Story, MYX Finance, Immutable, and Pudgy Penguins were among the biggest laggards as they fell more than 60% during this period.

These altcoins have underperformed the broader market as the Crypto Fear and Greed Index fell to the fear zone of 25. This also occurred as investors continued to reduce leverage, as evidenced by falling open interest.

Deleveraging accelerated after the October 10 situation, when more than 1.6 million traders suffered losses of $20 billion. This eradication has led to less demand for altcoins, which are considered riskier than Bitcoin.

Most notably, the Altcoin Season Index also fell due to Bitcoin’s continued decline. Historically, altcoins tend to experience steeper declines when Bitcoin declines.

Altcoin season could be in jeopardy as double top form

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

The valuation could be at risk of a sharper decline as it forms a double top pattern at $1.16 trillion and a neckline at $658 billion. It also fell below the Fibonacci Retracement level of 38.2%.

The market cap has also fallen below the 50- and 200-day exponential moving averages, a sign that bears remain in control. The Relative Strength Index and the MACD have also continued to decline in recent months.

Therefore, the most likely outlook is for altcoins to continue falling as sellers target the 50% retracement of $739 billion. A drop below that level could lead to a further decline towards the neckline at $658.