BTC dominance looks positive for the altcoin market. Below, we will explain why.
Despite the rebound on December 24-25, it remains with a descending candlestick structure on the daily timeframe. The best thing that can be seen now is a break of the EMA 50 on the daily timeframe (currently 58.06%) and a test of the EMA 200 of the same timeframe (currently 57.30%). The best scenario would be in the coming days. There are chances for this.
Globally, the signal for a decline in dominance from our indicator since December 20 is playing out. On the daily timeframe, there were three candles with markers - and then followed a downward impulse.
We would like to draw attention to the fact that yesterday a similar reversal structure completed formation on the older 2-day timeframe, where the outcome is more likely. This is now a key positive signal for further decline in dominance. At least, there should be no growth in dominance in the coming days.
On this timeframe, by the way, the dominance is also sitting right above the EMA 50, which is at 58.05%. Approximately the same level as the EMA 200 of the 12-hour timeframe, EMA 50 and 200 of the 4-hour timeframe.
So we have a combo of EMAs, which significantly increases the importance of support, but also raises the significance of a potential break. A break of 58% now could provide an impulsive decline.
According to our indicator, the 12-hour timeframe remains very important, where dominance stays in a stable uptrend.
As long as dominance is below 58.40%, there is a high probability that we will see a trend change in the coming days. Because on the 4-hour timeframe, dominance has a stable downtrend, and signals of a potential high are formed in the rebound. The current candle is an additional marker of reversal after a slight over-high, but it is important to wait for its closure.
The situation regarding trends: the recent rebound is a reaction to the trend support since January 14, 2024. A break of this year-long support already occurred in early December but turned out to be false. A repeat break would be a very good sign for altcoins. Currently, the trend is at 57.68%.
On the weekly timeframe, the situation remains the same - a strong confirmation signal for the start of the altseason was given at the end of the first week of December. After which, there was a massive long squeeze across altcoins with a retest of the breakout of accumulation zones, and cries of 'there is no altseason/will not be'. As long as dominance is below the Potential break level (58.65%), there is no risk of canceling the started altseason. The sentiment of total disbelief in it, stories about 'there is no liquidity!', 'where will the growth come from?!', 'institutions are not bringing into altcoins!' - is perfectly in line. Later, the crowd will understand, but it will already be too late.