A new theory supporting the possible kickstart of the altcoin season has emerged as Bitcoin dominance struggles with a key trend level.
Rekt Capital highlighted this today, further fueling the sentiment that altcoins will imminently begin their long-anticipated rally. The market watcher analyzed the current trends of Bitcoin’s dominance, revealing why it could continue to decline and pave the way for other cryptocurrencies to gain a share of the global cryptocurrency market.
BTC.D Loses Key Macro Trend Levels
At the time of writing, Bitcoin now holds 58.14% of the total cryptocurrency market cap, down considerably in the past week. Zooming out, the index has been on a downtrend, now correcting 11.9% from its June peak of 66%.
Meanwhile, this could mean more, at least according to Rekt Capital’s analysis today. He highlighted that the June rejection at 66% saw the BTC dominance lose a crucial lower high resistance level. More importantly, it also ensured it lost a macro uptrend area at 63.96%, undermining the chances of a rally to 71%.
With the bearish trend persisting, the BTC.D is now about to transition from a macro uptrend to a macro downtrend, with either of two identified scenarios required to confirm the shift. The first is if the index turns the uptrend level at 60% into a new resistance. This involves retesting and facing rejection from the macro level.
However, it might not need that if it continues to go sideways and turns the support at 57.68% into a resistance level. This would fully confirm the shift from macro uptrend to macro downtrend for the Bitcoin dominance index, setting the stage for altcoins to rally.
Cautionary Bitcoin Dominance Analysis
Despite the optimism, IntoTheCryptoverse founder Benjamin Cowen had earlier warned that the Bitcoin dominance would rebound to higher prices. In the commentary, he shared three price outcomes for Bitcoin that will drive the BTC.D upwards.
For perspective, he noted that if Bitcoin bounced from the 20-week SMA, its dominance would rise with it, which would jeopardize the altcoin season. Again, if Bitcoin loses the moving average but finds support at the 50-week SMA, altcoins will also fall with it, moving Bitcoin’s dominance higher.
Finally, Cowen noted that Bitcoin could simply consolidate around the 20W SMA throughout September, causing altcoins to bleed. This way, its dominance also goes up.
Aligning Indicators Suggest Imminent Altcoin Season
Nonetheless, several indicators suggest an imminent altcoin season is approaching. Aside from the dwindling dominance, expert Raoul Pal highlighted a beautifully set up TOTAL3 market cap.
The index, which measures the total cryptocurrency market cap excluding Bitcoin and Ethereum, is nearing a breakout from a multi-year triangle. If this happens, altcoins would gain momentum, led by XRP, outperforming the two largest cryptocurrencies by market cap.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
