Some of the biggest names in altcoins from 2018 to 2019 have been the weakest performers, experiencing greater than -90% losses from their all-time highs. The past two trading sessions have seen some of these former stars shoot up over over +25% in the past two trading days.

Altcoins on the rise, former losers now the biggest gainers

               There were few names that were probably more well known in the altcoin community back in 2018 and late 2017 than Ripple (XRP) and Stellar Lumens (XLM) – certainly Ripple more than Stellar. But as bullish as speculators and investors were, they were not immune to the overall bear market from December of 2017 to February of 2019. In fact, there were few cryptocurrencies in the top 15 market cap cryptos that underperformed as poorly as Ripple and Stellar. But those former losers are now the biggest gainers. From yesterday’s (September 18th, 2019) open at $0.2615 to today’s current high of $0.3292, Ripple has gained over +26.03%. Stellar has had an even more dramatic drive. In fact, as I was writing this article, I observed Stellar move from being up +15% on the day to now over +30%! Alt season is exciting! For Stellar, it has moved from yesterday’s open of $0.0587 to today’s high of $0.08949. That’s a +52.28% gain in under 30 hours! Insanity! But this is what an altcoin season should look like.

               While there is still a significant amount of time and price movement that needs to happen before we can declare an alt-season has begun, the past two days have been the strongest evidence for the beginning of this cycle. For those of you who don’t know what these cycles are in cryptocurrencies, they generally follow this pattern:

  1. Fiat to Bitcoin
  2. Fiat to Bitcoin and Bitcoin to Altcoin
  3. Bitcoin to Altcoin
  4. Altcoin to Bitcoin
  5. Bitcoin to Fiat

The longest periods that we should observe are cycles 1 and 2. The most profitable, from an altcoin trading standpoint, is cycle 2. Cycle 2 is especially important because it represents the most bullish period for the cryptocurrency market as a whole. What we should observe in cycle 2 is altcoins finding massive, double digit gains. We have that. That is evidence of speculators moving Bitcoin into the altcoin market. But we also want to see Bitcoin rise or trade relatively flat. If altcoins are rising and Bitcoin is trading fairly flat, then what we have is a super cycle of capital. We have enough Bitcoin leaving to support altcoins, but we also have enough fiat coming in at the same time to support Bitcoin’s price level. The most ideal condition to see would be for Bitcoin to rise along with the altcoin market – then we’re talking about a huge influx of new money into Bitcoin which further adds to the rally. I am still cautious about the market though – Ripple and Stellar are currently great measures of the health of this current spike. If both Ripple and Stellar can maintain a majority of their gains after currency and futures markets close this Friday – I think we’ll have the official start of the altcoin season.

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Shield Wall Trading, LLC