CAPITALIZATION RANT:
Nicknames are capital. Nicknames are NOT term of endearments, they are names. Therefore they are capitalized. If your nickname is Ally you capitalize it. Term of endearments are things like baby, babe, honey, and etc. Term of endearments are NOT interchangeable with names, that’s how you can tell the difference.
«« For example, let’s say you call your husband "honey." You might walk in the door and say “Honey, I’m home,” but you wouldn’t call your sister and say, “When I got home, honey was already making dinner. What a guy!” »» exert from Quick and Dirty Tips
This article was published June 14th 2012, by Mignon Forarty. I did some research on her and found she is the professor of journalism at the University of Nevada. She has nine published books. I consider this a reliable source.
https://www.quickanddirtytips.com/education/grammar/are-nicknames-capitalized