Bitcoin Dominance hits strong resistance, market reversal signal?
The Bitcoin dominance rate (BTC Dominance – BTC.D) has just entered an important resistance area of 64%-76%, according to technical analysis by expert Gert van Lagen. This is also the area where BTC.D peaked in 2021, before market capitalization shifted strongly to altcoins.
The bullish wedge pattern forming on the BTC.D chart is a common signal when the market is about to run out of steam. If this scenario repeats, Bitcoin could gradually lose its edge over altcoins, similar to the cycle of 2021.
Although BTC.D has been continuously rising for nearly 3 years, this exhaustion signal has led investors to begin questioning: Is the Bitcoin dominance uptrend about to end, paving the way for the next 'altcoin season'?
A new cycle may break the old rules.
According to analyst Scott Melker, the current cycle is unlike any before. Previously, investors would often shift capital from Bitcoin to altcoins when BTC stagnated.
However, he believes that this time, new money is flowing into Bitcoin from institutions, governments, and individual investors, rather than spreading to altcoins.
"Capital cannot be transferred from ETF to meme coins," Melker stated.
However, Titan of Crypto, a prominent analyst in the cryptocurrency field, shows a different perspective. Based on his latest analysis, the altcoin market is showing positive signs.
The chart he published indicates that the total market capitalization of altcoins has broken a long-term downtrend line, showing that the downtrend is losing steam.
In particular, the MACD indicator, a momentum assessment tool, has recorded a bullish crossover signal.
A similar signal appeared at the end of 2024, paving the way for an impressive growth period in the altcoin market in the months that followed.
Conclusion: The cryptocurrency market is at a significant crossroads, where both Bitcoin and altcoins are sending opposing signals.
While Bitcoin Dominance faces strong resistance and is at risk of reversal, opening opportunities for altcoins, institutional money is still reinforcing Bitcoin's position.
However, with positive signs from altcoin market capitalization and the MACD indicator, the 'altcoin season' may not be far off.
Investors need to carefully consider, based on technical analysis and cash flow trends, to make informed decisions in this volatile market context.