Trading on all time frames, particularly in an alt season, is all about timing the end of a market cycle. You don't want to lose all of your BTC you've accumulated from alt coins because you mistimed the change back into BTC. But how do you know when an alt season is over and it's time for Bitcoin to take center stage once more?
Bitcoin's dominance is crucial to the Alt Season's success.
When attempting to decide the end of a business cycle, search for a specific candle or pair of candles that typically characterize the cycle's end. The candles will naturally vary depending on whether you're aiming for the end of a bull or bear market, but the idea remains the same. We're looking for a bottoming candle on the Bitcoin supremacy stage to signal the start of an alt season.
A long trailing wick distinguishes bottoming candles, which appear after a time of downward movement. The long trailing wick indicates that this price enticed buyers, who stepped in and pushed the price back up, setting up a reversal:
The tweezer bottom is another type of bottoming candle to look for. Tweezer bottoms are two consecutive candles that form after a downtrend and have the same low point:
As we can see, these candle combinations triggered an upward trend in both cases. When it comes to previous alt seasons, we can see several examples of these reversal candles by looking at the Bitcoin supremacy chart:
These candles were accompanied by Bitcoin reclaiming its supremacy over alts after a time of downtrend in both of these cases – these circles are the points where you could have flipped alts back into BTC.
When we take into account the support/resistance lines that follow these movements, we can see where such reversals could have been expected:
It is actually very easy to spot when an alt season is about to end and a Bitcoin cycle is about to begin by combining support/resistance lines with bottoming candles, at which point you can consider scaling back into BTC while you wait for confirmation of the uptrend.
