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The recent momentum in the crypto market over the past four days has led to the return of bullish momentum in many cryptocurrencies, with Bitcoin price leading the way. Interestingly, this has led to the projection of impending gains in many altcoins, and the technicals suggest that an altcoin season may be in order.
Crypto analyst Kevin (@Kev_Capital_TA) recently drew attention to an important development of a daily death cross Bitcoin’s dominance. This rare event could mark a shift in cryptocurrency investing in the coming months, with implications for the future Bitcoin and the altcoin market.
Bitcoin dominance chart forms the daily death cross
According to a technical analysis of the Bitcoin dominance chart, the leading cryptocurrency is about to form a death cross in the daily candlestick time frame. A deathcross is a technical indicator where a short-term moving average crosses below a long-term moving average, often indicating bearish momentum. On the other hand, Bitcoin’s dominance chart tracks the percentage of the total cryptocurrency market cap represented by Bitcoin, and a decline often indicates increasing strength of altcoins.
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In this case, the daily death cross on Bitcoin’s dominance chart is forming at a macro level for the first time in four years, according to Kevin’s analysis. Interestingly, technical analysis shows that Bitcoin’s dominance has suffered two macro golden-pocketed rejections in the past three months, a phenomenon that adds even more weight to the change in market dynamics if a death cross were to eventually manifest .
What does this mean for cryptocurrencies?
Kevin’s analysis highlights a historical precedent in which a daily deathcross at a macro height preceded the start of the alt season. Four years ago in 2021, a similar event occurred on the Bitcoin dominance chart, preceding a shift in market momentum from Bitcoin to altcoins. During that time, Bitcoin’s dominance was approximately 63% of the entire market capitalization. However, in the subsequent altcoin season, Bitcoin’s dominance dropped below 40% in April 2021.
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The current setup suggests that a similar scenario could unfold. If the death cross leads to a sustained decline in Bitcoin dominance, it could pave the way for a rally in the altcoin market.
Nevertheless, Bitcoin continues to dominate the inflows. At the time of writing, Bitcoin was trading at $99,750, with a market dominance of 55.8%. However, recently price performance of cryptocurrencies such as XRPDogecoin and Solana appear to threaten this dominance. On the other hand, Ethereum, the king of altcoins, has yet to manifest itself a similar rally this cycle.
Complementing this perspective, crypto analyst TechDev pointed out the beginning of an alto season. His analysis focuses on the six-month time frame of the Bitcoin dominance chart, where he points out that the current candlestick is the one where altcoins will make their move. According to TechDev, the current candlestick corresponds to historical moments when altcoins rallied, citing parallels in 2017 and 2021. He explained that during these cycles, Bitcoin dominance declined in a new six-month candle after hitting an all-time high of had surpassed the previous cycle.
Featured image created with Dall.E, chart from Tradingview.com