Altcoins Set To Shine After Brutal Bitcoin Dominance Rejection
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Altcoins still have tons of catching up to do against their big brother Bitcoin. The cryptocurrency currently enjoys an over 65% market share dominance over the rest of the space.
However, that number is set to fall hard, after a strong rejection on BTC.D charts has potentially confirmed a bear flag pattern. The target of the pattern would take the metric down to 59%, just a tick above where alt season lies.
Bitcoin’s First Mover Advantage Keeps Throne In Tact
Bitcoin is the first-ever cryptocurrency. Due to its first-mover advantage and lead in the market, it has long dominated the industry. Years, ago, BTC dominance was untouchable at well above 90% of the market.
But in early 2017, BTC dominance started an extended and powerful downtrend that took to as low as 35%. During this time, altcoins like Ethereum and XRP had five-digit percentage returns. Other, smaller-cap altcoins performed even better.
Life-changing wealth was generated, and a modern-day gold rush occurred. Retail investors FOMOed into altcoins without understanding what they were or used for. Bitcoin ballooned to $20,000, while Ethereum reached over $1,400 and Ripple over $3.50 per token.
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Capital was flowing all through the crypto market, but altcoins had captured an enormous amount of market share from Bitcoin.
Since that bottom in BTC dominance was hit, however, altcoins have been in a steady downtrend that’s wiped out over 90% of their gains in most cases. While there are a few outliers in the market that perform regardless of Bitcoin, most suffer at the hands of BTC.
Bitcoin Dominance (BTC.D) Daily | Source: TradingView
Altcoins May Finally Recover If BTC Dominance Bear Flag Target Is Reached
Altcoins may soon get a sizable chunk of dominance back, as the latest price action in BTC.D shows a firm rejection of former support turned resistance.
This support level that’s now acting as strong resistance is the bottom trend line on a multi-month bear flag.
Bitcoin Dominance (BTC.D) Daily | Source: TradingView
Bear flag formation targets are measured by taking the flag pole and applying it to the breakout. The target of this structure would be somewhere around 59% dominance.
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Zooming out on weekly timeframes, the fall will take BTC.D to a pivotal level where a longer-term decision will be made.
Bitcoin Dominance (BTC.D) Weekly | Source: TradingView
Below the 58% level on BTC.D charts may lead to an extended altcoin season. An altcoin season is a duration of time, much like early 2017, when altcoins significantly outperform Bitcoin.
Altcoins make up most of their gains during these explosive movements. But they only occur when BTC.D is falling.
If BTC.D finds support at 59% and holds, altcoins may be in for further reckoning as Bitcoin eats up even more market share in the months ahead.
Featured image from Shutterstock. Charts from TradingView.
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