BTC dominance is showing bearish divergence on RSI, indicating a potential market shift toward altcoins.
The MACD indicator is flattening near the neutral line, signaling a possible momentum reversal.
A reversal in BTC dominance from the 58%–60% zone may trigger the largest altcoin season of this cycle.
Bitcoin could be preparing for a notable shift in market momentum, as it gets closer to breaking its key resistance point. RSI, along with MACD, is indicating that altcoins could soon play a bigger role in the cryptocurrency market. This comes as BTC dominance, which measures Bitcoin's market capitalization relative to the entire crypto sector, has shown signs of exhaustion following a sustained multi-year uptrend.
Momentum Indicators Signal Potential Reversal
BTC dominance has steadily climbed from a low of around 39% in 2021 to nearly 60% by early 2025. This upward trend, while significant, is now facing technical resistance. There is a clear bearish divergence between the dominance chart and the RSI. As BTC dominance has been making higher highs, the RSI has been in decline, meaning that the strength of the move is decreasing. This sort of divergence is typically how traders see that there is a potential reversal imminent.
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The RSI is currently above the 60 point, which is one to indicate strength but not quite to confirm a continuation bull. A downtrend line on the RSI indicates multiple instances where there have been efforts to break higher, bolstering the idea that momentum is waning while dominance remains high.
MACD Flattens as Uncertainty Builds
Further evidence of market indecision is found in the MACD. The two key lines—the MACD and the signal line—are converging near the neutral 0.00 level. A green arrow on the chart marks the last bullish MACD crossover from 2021, which correctly preceded the current BTC dominance rally. Now, with both lines appearing to flatten, the market may be nearing a decision point.
Source: ( X)
The histogram bars have narrowed in recent weeks, a development that typically precedes volatility. Although a definitive crossover has not yet occurred, the lack of upward momentum and increasing compression between the lines may indicate a forthcoming shift in trend.
Implications for Altcoin Performance
Should BTC dominance decline from its current range of 58%–60%, capital may rotate into altcoins, as seen in previous market cycles. A green shaded area on the chart marks a potential reversal zone, where BTC dominance may begin to fall. Historically, such declines have coincided with strong rallies in large-cap and mid-cap altcoins.
As of press time, Bitcoin’s price stands at $107,968, with a recent 0.9% decline. The nearest support lies at $107,107, while resistance is noted at $109,057. While price action remains narrow, market structure on the dominance chart may prove more influential in shaping short-term market behavior.
Analysts will likely continue watching dominance metrics closely. If confirmed, the current signals could mark the start of a significant rotation phase in the cryptocurrency cycle.
