Recent analysis from experts suggests that the crypto market may be approaching a transition phase. The chart shows that the dominance ratio of Bitcoin (BTC.D) is declining sharply.
Historically, this is a signal indicating that investors are paying more attention to altcoins. Compared to previous cycles, this analysis suggests the possibility of a strong altcoin price increase.
In a recent post on X, analyst and trader Tardigrade presented a technical chart showing that Bitcoin's dominance ratio is declining sharply.
The analysis points out that the long-term ascending wedge pattern on the BTC.D chart has recently been broken downward.
In the past, similar breakouts were accompanied by rapid altcoin market growth. This phase is often called the "altcoin season".
The chart refers to two important periods in market history – 2016/2017 and 2019/2021 – when BTC's dominance ratio declined sharply after prolonged upward trends.
These periods coincided with a surge in the total altcoin market capitalization (Total2), meaning capital was cycled from Bitcoin to altcoins.
Tardigrade's forecast calls the upcoming period the "Altcoin Season 2025–2027". He identifies a potential timeframe spanning several years, during which altcoins may outperform Bitcoin in market performance.
According to the analysis, the ascending wedge pattern formed over the past few years on the BTC dominance ratio chart has been broken downward. This pattern is typically seen as a trend reversal signal, indicating the potential decline of Bitcoin's dominance.
The steep arrow on the chart emphasizes the predicted breakdown. The historical context is illustrated through green areas, representing past altcoin cycles.
The shared data shows a strong correlation between BTC.D breakdown and Total2 expansion.
Each time Bitcoin's dominance ratio declines is accompanied by increased capital flow into altcoins.
In previous altcoin seasons, the altcoin market capitalization grew continuously as Bitcoin's market share weakened.
Total2, an index measuring the total market capitalization excluding Bitcoin, grew strongly during previous dominance ratio breakdowns.
The inverse relationship between BTC.D and Total2 is a recurring trend in crypto market cycles.
Tardigrade's chart includes these movements to draw parallels with the current situation.
Additionally, DefiWimar notes that altcoin capitalization could surge up to $20 trillion in the coming months.
This could be the beginning of potentially the largest altcoin season to date. Comparing with previous cycles in 2017 and 2021, he suggests some altcoins might excel with profits far beyond previous peaks, potentially reaching 1000x.
Trader Tardigrade's forecast refers to the expected period as the "2025–2027 altcoin season". The analyst has outlined a potential timeline for the altcoin market's development.
With Bitcoin's dominance ratio showing signs of reversal after a long-term upward trend, attention is gradually shifting to the altcoin sector.
Disclaimer: The article is for informational purposes only and is not investment advice. Investors should thoroughly research before making decisions. We are not responsible for your investment choices.
Join Telegram: https://t.me/tapchibitcoinvn
Twitter (X): https://twitter.com/tapchibtc_io
Tiktok: https://www.tiktok.com/@tapchibitcoin
Youtube: https://www.youtube.com/@tapchibitcoinvn
Dinh Dinh
