Bitcoin dominance stood firm at 4.17 percent as RSI dropped showing signs of weak momentum and rising risk
Visible bearish RSI divergence formed while the dominance chart continued climbing higher above its key trend
Altcoin holders are now watching for a drop in Bitcoin dominance that may confirm a shift in capital rotation
Bitcoin dominance rose to 4.17% on June 8, sparking renewed caution across the altcoin market as momentum signals weaken. A strong upward trendline has supported the dominance rally, but visible bearish divergence in the RSI raises questions. Traders and analysts are watching closely for signs of a potential reversal or breakout.
Source: X Bitcoin Dominance Builds Momentum
The current dominance chart from TradingView shows Bitcoin's market share climbing steadily from below 4.20% to 4.17% over two weeks. This climb has followed a clean upward structure, confirmed by repeated higher lows and consistent trendline support. A strong cluster of volume in the mid-range supports this consolidation.
The trendline from late May to early June has served as dynamic support, confirming bullish structure for BTC's share of market cap. The price action has remained above key volume profile levels, especially where the trendline intersects volume nodes. This alignment typically signals strength and buyer interest.
Despite these bullish technicals, traders have expressed caution due to chart patterns that often precede consolidation phases. Dominance increases can sometimes signal capital rotation away from altcoins, prompting temporary weakness in that segment. Analysts are now closely watching for signs of a breakdown below this rising structure.
RSI Divergence Warns of Slowdown
A key concern is forming through the relative strength index (RSI), which shows visible bearish divergence against the rising dominance chart. While the price made higher highs, RSI made lower highs—signaling a possible weakening of momentum. This classic divergence pattern has historically preceded reversals in price structure.
Divergences in RSI often emerge when asset strength begins to decline despite price continuation. This can result from decreased volume or buyer fatigue near resistance zones. In the current context, such patterns could indicate that Bitcoin dominance may slow or reverse after its recent rally.
The lower panel of the chart clearly shows RSI peaking in early June and dipping while dominance held above 4.15%. If the RSI continues forming lower highs and breaks below trendline support, analysts may anticipate a cooling-off period. Traders often react to such signals by shifting allocations or reducing leverage.
Altcoin Traders Watch for Rotation Trigger
With Bitcoin dominance rising, altcoin holders have grown cautious, waiting for signs of a shift in momentum. Historically, breakouts or breakdowns in BTC dominance often serve as early signals for altcoin rallies or corrections. If dominance begins to fade, capital may rotate back into alt assets.
Key altcoin traders often track BTC dominance to determine when the market may favor broader participation beyond Bitcoin. A drop in dominance often precedes altcoin season, where returns shift heavily to lower-cap assets. Traders will be watching closely for a clean breakdown in the BTC dominance trendline.
At the 4.17% dominance mark, any strong rejection or loss of trendline support could become the next signal for a potential altcoin move. The RSI divergence and the latest candles near resistance zones may hint that a change is approaching. But for now, price holds above the key level.
