Bitcoin dominance has been trending upward since September 2022. Is that trend about to reverse? Is this the time to start building altcoin positions?
Bitcoin has outperformed
Unless you got into a small handful of outperforming altcoins when this crypto bull market began, you would have done better to just hold Bitcoin. $BTC has outperformed the overall cryptocurrency market by around 40% since September 2022. Only certain altcoins, such as $SOL and $RNDR, and memecoins like $PEPE and $WIF, have managed to do better than the king of the cryptocurrencies.
Bitcoin dominance rolling over
Source: TradingView
The Bitcoin Dominance chart shows that since mid-April, dominance has started to roll over. Of course, there is still the possibility that this could be the formation of a flag, and that the price could be likely to come out on the upside, given that it is still in an uptrend. However, even if this should happen, strong resistance at the 57% level would potentially stop any more dominance growth.
Bitcoin dominance loses long-term wedge pattern
Source: TradingView
Zooming out into the weekly time frame, it can be observed that Bitcoin dominance has recently dropped out of the long-time wedge pattern. Given how dominance had almost reached the apex of the wedge, it had to exit to the upside or downside, and this kind of pattern would normally break downward, which is exactly what has happened.
Is an altcoin season on the horizon?
Source: TradingView
Regarding the possible targets for Bitcoin dominance, there are support levels all the way down to 49% and lower - 50% down to 49% probably providing the main support.
Given that Bitcoin dominance is currently at just under 55%, a fall down to lower dominance levels would provide the altcoins a huge opportunity to catch up. Does this mean that alt season could be on the horizon? Considering that Bitcoin has generally hogged the limelight for the last 18 months or so, an altcoin season is certainly a possibility - just make sure you are in the right ones.
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.
