Bitcoin (BTC) dominance (BTC.D) is struggling to break out of a rising wedge amid growing speculation as to whether the Altcoin season has begun.
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As Bitcoin faces continued resistance around $60,000, analysts believe these conditions could set the stage for an Altcoin season.
Is Bitcoin in decline?
As of this writing, BTC.D is trading at 56.91%. On August 5, it failed to break out of the upper line of the rising wedge and has been trending down since then.
Bitcoin’s dominance
Failure to break out of a rising wedge is often seen as a bearish sign, suggesting that Bitcoin’s dominance may have peaked or is declining. As Bitcoin’s dominance weakens, it creates opportunities for Altcoin to gain market share. This is the case with TOTAL2, which has been rising since August 5.
TOTAL2 measures the combined market capitalization of the top 125 Altcoin. At press time, this figure stands at $870 billion, up 2% since BTC.D began its decline.
Bitcoin Market Cap
BTC.D’s recent moves have further fueled speculation among cryptocurrency analysts. Bitcoin’s dominance is facing strong resistance on the downside, preventing it from breaking out of the wedge, further fueling speculation.
BTC dominance stalled at a larger descending trendline and failed to break out of its rising wedge bullish pattern. This is good news for Altcoin as the probability of this trend reversing in the near future increases.
BTC.D is the “ending diagonal.” The ending diagonal is a term used in technical analysis to describe a chart pattern that indicates a potential trend reversal.
If BTC.D forms a closing diagonal pattern, it would signal a major shift in market sentiment. Such a shift typically signals the end of Bitcoin’s dominance, often leading to a surge in Altcoin activity and higher prices.
Only a few currencies can outperform the leading currencies
Regardless of the analyst’s stance, it is important to note that Altcoin season begins when at least 75% of the top 50 Altcoin have outperformed Bitcoin over the past 90 days. Currently, only 14 Altcoin(28%) have done this.
Seasonal Index for Altcoin
Furthermore, looking at the daily chart, TOTAL2 is trending within a horizontal channel. This channel forms when buying and selling pressures are relatively balanced, preventing its price from moving strongly in either direction.
TOTAL2 Weekly Analysis
When TOTAL2 successfully breaks above the upper line of the channel forming resistance, the Altcoin season will begin in full force. Such a breakout will confirm stronger momentum, signal a shift in Bitcoin dominance, and open up space for other cryptos to grow.
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