Altcoins
Bitcoin Dominance Increases, But a Reversal Is Coming
Crypto Daily – Dominance has been on the rise since September 2022. Is this trend about to reverse? Is it time to start building altcoin positions?
Bitcoin has outperformed
Unless you happened upon a handful of altcoins that were outperforming when this crypto bull market started, you would have been better off just holding Bitcoin. $BTC has outperformed the overall cryptocurrency market by about 40% since September 2022. Only a few altcoins, like $SOL and $RNDR, and memecoins like $PEPE and $WIF, have managed to outperform the crypto king.
Bitcoin’s Dominance Is Overturning
Source: TradingView
The Bitcoin Dominance chart shows that since mid-April, dominance has started to flip. Of course, there is still a possibility that this could be a flag formation and the price could probably break out to the upside, as it is still in an uptrend. However, even if this were to happen, a strong resistance at the 57% level could potentially stop any further dominance growth.
Bitcoin Dominance Loses Long-Term Wedge Pattern
Source: TradingView
Moving away from the weekly time frame, we can see that Bitcoin dominance has recently broken out of the long-standing wedge pattern. Since dominance had almost reached the top of the wedge, it had to break out either to the upside or to the downside, and this type of pattern would normally break out to the downside, which is exactly what happened.
Altcoin season approaching?
Source: TradingView
As for possible targets for Bitcoin dominance, there are support levels going down to 49% and beyond: 50% to 49%, which likely provides major support.
With Bitcoin dominance currently sitting at just under 55%, a drop to lower dominance levels would provide altcoins with a huge opportunity to reclaim ground. Does this mean altcoin season could be on the horizon? With Bitcoin having generally dominated the scene for the past 18 months or so, an altcoin season is definitely a possibility, just make sure you’re in the right ones.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other professional advice.