Bitcoin dominance declines after a wedge breakdown, signaling potential altcoin season as the market shifts to broader participation.
BTC.D drop to 58.29% suggests bearish sentiment, with a projected downside near 48%, favoring altcoin market growth.
Altcoins are poised for gains as Bitcoin dominance weakens, indicating a redistribution of market value across cryptocurrencies.
Bitcoin dominance experiences a shift as shown by a recent analysis by ZAYKCharts on X. The analyst highlights a breakdown of an ascending wedge pattern that has been forming since April 2021. After the retesting phase is over, the expert expects altcoins to experience a jump in prominence.
BTC.D Breakdown and Retesting Process
The BTC.D forms an ascending wedge with higher lows and higher highs marking the trendlines. Bitcoin dominance peaked near 62% in mid-2024 before a reversal occurred. A rejection from the upper boundary of the wedge triggered a steep decline. The breakdown from the lower trendline has confirmed a bearish shift in market dominance. According to ZAYKCharts, the projected downside is about 20.17%, potentially bringing BTC.D to the 48% level.
Source: ZAYKChart
The recent movement has seen BTC.D drop from above 60% to its current value of 58.29%. Despite this drop, the analyst believes that Bitcoin’s dominance could continue to fall. The breakdown signals increasing market participation from altcoins, suggesting that Bitcoin’s dominance will further weaken. Additionally, the bearish candlestick patterns following the breakdown reinforce this negative outlook. Strong red candles have appeared, signaling a shift in market sentiment and hinting at a broader trend away from Bitcoin.
Impact on Altcoins and Market Sentiment
Besides the technical breakdown, the shift in Bitcoin dominance suggests that altcoins are poised to gain market share. This breakdown could lead to a massive altcoin season once the retesting process is completed. Bitcoin’s loss in dominance may cause other cryptocurrencies to attract more investor attention. The growing trend of market value is distributed among altcoins rather than being concentrated in Bitcoin.
Moreover, the historical price movements within the wedge emphasize the volatility and testing of key trendlines. As the market continues to test support and resistance levels, the shift in dominance could be a signal for a larger market rebalancing. Hence, the technical analysis points to a phase of market evolution, where altcoins might take center stage, reducing Bitcoin's share in market capitalization.
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