Bitcoin dominance has remained quite high over the past year, remaining firmly above 50%, preventing altcoins from making a meaningful recovery. Even now, its dominance has risen almost 60%, showing that Bitcoin is still driving the direction of the entire market. However, a development has taken place that could change the trajectory of Bitcoin dominance and put altcoins back in the spotlight, crypto analyst Unichartz points out.
Bitcoin dominance breaks below the 50 EMA
Since 2023, Bitcoin dominance has remained firmly above the 50-day exponential moving average (EMA), showing tremendous strength around this level. Even during market crashes, the digital asset has maintained its dominance, and with each passing year the trend line has continued to rise. As long as Bitcoin dominance remained above the 50 EMA, it appeared that it would continue to dominate, but this is now changing.
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According to Unichartz’s report it is shows that Bitcoin dominance has now crashed below the 50-day EMA for the first time in almost a year. This is because dominance lost its position above 60% and failed to regain its position above.
Naturally, an attempt has been made to reclaim the 50-day EMA. However, this attempt failed after the brief surge above 63% in early October was thwarted by the market-wide crash on October 10. Since then, dominance has remained below the 50 EMA and has now been below this critical level for a full month in a row.
What this means for the crypto market
Historically, altcoin season didn’t start until the Bitcoin’s dominance has declined. This trend has held strong over the years, even preventing the emergence of a new altcoin season during the current cycle.
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However, with the crash below the 50 EMA, the analyst predicts that Bitcoin dominance is about to see a massive crash. It shows that its dominance will fall below 40% if it fails to regain the 50 EMA quickly. Such a crash would give space for altcoins to actually run while the focus turns away from Bitcoin.
With the Altcoin Season Index is at a low 31 As I write this, it appears that a crash in Bitcoin dominance is desperately needed for altcoins to rise again. However, the analyst explains that if dominance regains the 50 EMA, it will Bitcoin’s lead could be extended even longer before attention returns to altcoin.
Featured image of Dall.E, chart from Tradingview.com