As bitcoin continues to struggle to make a new all-time high, the altcoins are perhaps starting to manoeuvre for their next big push up in this crypto bull market. Bitcoin dominance has broken down. Could this be the beginning of an altcoin run?
Altcoins suffer less than $BTC
No sooner does bitcoin get a rally going than it meets with rejection. The recent news of $BTC being moved out of Mt.Gox wallets was the probable recent catalyst for this.
Of course, if bitcoin catches a slight cold, the altcoins normally get the flu, so the $BTC dump did little to enhance altcoin prices across the board. That being said, the combined market cap of altcoins does not appear to have suffered as much as the $BTC price.
Ethereum is a major factor
Ethereum (ETH) is probably one of the major factors for this, given that this morning’s Mt. Gox blip has already been absorbed by the number 2 cryptocurrency by market cap. The $ETH price is continuing to rally following the approval of the Spot Ethereum ETFs, and is likely to maintain this momentum, at least in the short term.
If $ETH is strong, the altcoins are more likely to follow its lead, and it could be expected that it won’t take long for certain of the altcoins to catch up on $ETH and then outperform.
Bitcoin Dominance breaks trend on weekly time frame
Source: Coingecko/TradingView
That said, it’s the BTC Dominance chart that is of most interest right now. As can be seen above, dominance has just dropped down through the trend line it has been following above, all the way back to November 2022. Given that the chart is in the weekly time frame, the break has huge importance. The break still has to confirm with a candle body closing below at the end of this week, but this is so far looking quite likely.
Source: Coingecko/TradingView
The daily chart shows the support levels for Bitcoin Dominance. Note the M pattern that the price has traced out above the 54% support. This is a bearish pattern, and should it play out, the price would go down to the 51% support.
Altcoin season?
It’s still too early to call an altcoin season, and according to Blockchaincenter.net, we are at 35 on the Altseason Indicator, which is a long way short of the 75 which is the level at which this officially takes place.
Nevertheless, we are in a bull market, and altcoins should have their time in the sun at some point. The Bitcoin Dominance chart is the most reliable indicator for this, and keeping one’s eyes peeled on it is perhaps a good strategy.
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 advice.
