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Bitcoin, the largest cryptocurrency in the world, is losing its grip on market supremacy, changing the crypto scene. Analysts believe that cryptocurrencies could soon be in the spotlight as their market share drops to 55.80% and sees a confirmed sell signal for the first time since 2020. Bitcoin’s price struggling to maintain momentum and dropping below key trendline support, this sentiment is gaining ground.
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Bearish signals lead to suspicion of Altseason
The relative strength index (RSI), which indicates Bitcoin’s dominance, is trading below the midline, reinforcing negative expectations. Such situations have historically paved the way for what is known as “altseason” – a time when other cryptocurrencies shine above Bitcoin. Experts argue that capital from Bitcoin could flow into altcoins, generating instability and new investment prospects.
The sell signal has just flashed Bitcoin dominance for the first time since 2020
Let the real pleasure of it #ALTSEASON starts pic.twitter.com/R9QeCO69YH
— Mikybull 🐂Crypto (@MikybullCrypto) December 3, 2024
This trend is consistent with reduced equity holdings among long-term Bitcoin investors, and is therefore not just theoretical. Recent data from IntoTheBlock shows that wallets holding Bitcoin for more than 155 days currently hold only about 12.45 million BTC, the lowest since mid-2022. These balances, which have fallen by almost 10%, indicate that some individuals are cashing out gains or siphon their money into cold wallets.
Bitcoin: decline in long-term investments
As the expected $100,000 target for the alpha coin approaches, Bitcoin’s price is hitting strong resistance. Multiple failures at $97,500 have led to big declines. Bitcoin fell even further on Tuesday, selling around $93,940. This volatility is accompanied by a marked decline in long-term assets, making it difficult to say where the market is headed.
Long-term holders of Bitcoin are gradually reducing their balances and now own 12.45 million BTC – the lowest level since July 2022.
So far, this decline is less severe than in previous cycles. Long-term holders’ balances are down 9.8% this cycle, compared to 15% in 2021 and 26% in… pic.twitter.com/eA5Cckrgs4
— IntoTheBlock (@intotheblock) December 3, 2024
Although the current decline in the number of companies is less significant than that in 2021 or 2017, it draws attention to changing market attitudes. Some observers say this behavior shows deliberate repositioning by sophisticated investors trying to respond to changing market conditions.
Rare bullish signal offers hope among bearish moods
Even with the negative undertones, a rare bullish indication provides some hope. Recently, in line with moving averages, the Spent Output Profit Ratio (SOPR) indicates that Bitcoin could rise in the next one to two months. Such signs are rare, occurring only once or twice during an upward market cycle.
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While bearish pressure is still evident, experts note that these positive signals present good opportunities for risk-tolerant investors. Consistent with previous patterns following the halving events, market observers are also preparing for a possible downturn as January 2025 approaches.
For now, Bitcoin’s declining dominance and increasing volatility highlight the need for a careful but strategic approach. Whether it’s Altseason or a new Bitcoin peak, the coming months could change the scene of cryptocurrencies.
Featured image of DALL-E, chart from TradingView