Altcoin Season: Trend Line Analysis Shows Parabolic Targets for SOL and ETH

Altcoin season has officially kicked off and both Ethereum (ETH) and BNB Coin (BNB) have inaugurated this important phase of crypto’s bull market by reaching new all-time highs.

Meanwhile, Solana (SOL) has broken the psychological $200 threshold and could play catch-up with its two most prominent rival if the Federal Reserve delivers what the market expects today.

The U.S. central bank should cut rates by 25 basis points during this week’s FOMC meeting – or at least that’s what the majority of analysts surveyed by FedWatch believe.

The market has retreated ahead of this important gathering. Nevertheless, market conditions remain quite favorable for cryptos as a whole.

Now that Bitcoin (BTC) has set a new record, everything seems to indicate that altcoins will start to dominate the scene and could deliver the highest upside potential. The market cap of tokens in this category has reached $1.7 trillion and now accounts for almost 43% of the combined value of all cryptos.

Altcoin Season Index – Source: CoinMarketCap

Meanwhile, data from CoinMarketCap shows that Ethereum’s dominance has been steadily rising from 8% in May to 13% as of today.

That said, ETH may be the most valuable altcoin but other tokens like XRP (XRP), Solana (SOL), and BNB Coin (BNB) have a combined market cap of $439 billion, which makes them quite relevant for this category as well.

ETH Should Hit $5,000 After a Brief Pullback

ETH has not yet reached the psychological $5,000 threshold, which is what most of the community expected in these past few weeks.

ETH/USD Daily Chart (Bitstamp) – Source: TradingView

Instead, selling pressure accelerated after the token hit the $4,800 mark and investors have already rejected a move above this level three times in the past few weeks.

Today’s rate cut is already priced in and this means that we could expect a ‘sell the news’ moment after Powell confirms the decision. That said, his comments could bring new variables to the table and that could still move the market’s needle, especially if he sounds more dovish than expected.

We could anticipate a pullback for ETH to around $3,850 if selling pressure increases. This would be the expected result of a trend line break (as shown in the chart). At that level, ETH will encounter a key trend line support and could bounce off it to resume its path to $5,000.

Meanwhile, if the market were to retest its former trend line support from below, that would put ETH on track to hit $7K at some point during this cycle. Hence, even a strong pullback at this point of around 14% can be considered an opportunity for late buyers to enter the market at a point when altcoin season is only getting started.

SOL Could Rise to $500 as Bullish Momentum Accelerates

Moving on to Solana (SOL), we can see that a bullish breakout occurred recently above a key trend line resistance, meaning that the rally is accelerating.

SOL/USD Daily Chart (Binance) – Source: TradingView

The next stop for SOL after a retest of this line from above should be this year’s all-time high of $294. However, is that the highest this altcoin can go? That seems highly unlikely.

Apart from the macro catalysts we have mentioned, the successful implementation of the Alpenglow upgrade will bring Solana’s transaction processing speed to Internet-like levels. If we take a page out of Ethereum’s playbook, the Pectra upgrade propelled the latter to $4,000 – how high can Alpenglow push SOL?

Is it possible that SOL will reach $500 during this cycle? Truth is: every chip needed to get this token up there seems to be in place.