The dominance of bitcoin on the crypto market is approaching a historic resistance level which previously sparked major reversals. According to a technical analysis published on TradingView, the BTC market share could collapse up to 40 % in the coming months, potentially opening the way to a new Altcoin season.
In short
- Bitcoin domination reached 63.2 % of the crypto market, its highest level of the year.
- A technical analysis provides for a possible drop up to 40 %, or even 34.9 %.
- Cryptocurrencies like Ethereum, XRP, Cardano, ChainLink, BNB and Litecoin would be the first beneficiaries.
- The context is different from previous cycles due to Bitcoin ETF.
A major technical resistance which announces a turning point
The weekly candlestick graph shows that the domination of Bitcoin is approaching a level of critical historical resistance.
This phenomenon has already occurred in the past, and each time this descending trend line has been reached, a major reversal has occurred.
L'technical analysis suggests that history could be repeated, with a potential fall up to 40 %, or even 34.9 % in the most lower scenario.
Unlike the previous cycles, the domination of Bitcoin followed a different dynamic this time. It has increased considerably since the start of the current cycle, leaving little space for an altcoin season long awaited by many investors.
This phenomenon is partly explained by the growing institutional adoption of Bitcoin, in particular via the ETF Spot.
What Altcoins would benefit from a drop in dominance of Bitcoin?
A decrease in the domination of Bitcoin would mean that the Altcoins market outfits that of the first crypto.
In such a scenario, the first to benefit would likely be the established cryptos having resisted several market cycles, commonly called “dino” (dinosaurs in name only), in particular Ethereum, XRP, Cardano, Chainlink, BNB and Litecoin.
However, the current context differs significantly from the bullish markets of 2017 and 2021. The market now has thousands of altcoins, against a few hundred in previous cycles.
In addition, the presence of ETF Spot Bitcoin, which immobilize significant long -term liquidity, could limit the extent of flows to altcoins.
Beyond high capitalization cryptos, certain specific sectors such as artificial intelligence, tokenized active assets (RWA) and decentralized finance (DEFI) could also draw the attention of investors.
However, even within these categories, a rigorous selection process will take place to identify the most promising projects.
The potential fall in the domination of Bitcoin could therefore mark the start of a new phase in this market cycle, where altcoins would gradually regain their attractiveness with investors.
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