This article is also available in Spanish.
The recent cryptocurrency market momentum over the past four days has seen a return of bullish momentum to many cryptocurrencies, with Bitcoin price leading the way. Interestingly, this has led to predictions of impending rallies in many altcoins, and technical data suggests that altcoin season may be about to begin.
Recently, cryptocurrency analyst Kevin (@Kev_Capital_TA). he pointed out significant development of the daily death cross Bitcoin domination. This uncommon event could mean a shift in cryptocurrency investing in the coming months, with implications for: Bitcoin and the altcoin market.
Bitcoin dominance chart forms daily death cross
According to the technical analysis of Bitcoin dominance chart, the leading cryptocurrency will soon form a death cross on the daily candlestick time frame. A death cross is a technical indicator in which the short-term moving average crosses below the long-term moving average, often signaling bearish momentum. On the other hand, the Bitcoin dominance chart tracks the percentage of the total cryptocurrency market capitalization represented by Bitcoin, and a decline often signals the growing strength of altcoins.
As Kevin’s analysis shows, in this case the daily death cross on the Bitcoin dominance chart is at the macro level for the first time in four years. Interestingly, technical analysis shows that Bitcoin’s dominance has been met with macro-gold rejection twice in the last three months, which adds even more importance to changing market dynamics if a death cross were to eventually appear.
What does this mean for cryptocurrencies?
Kevin’s analysis highlights the historical precedent in which a daily macro-level death cross preceded the beginning of an alternate season. Four years ago, in 2021, a similar event occurred in the Bitcoin dominance chart, preceding the shift in market dynamics from Bitcoin to altcoins. At that time, Bitcoin’s dominance was approximately 63% of the total market capitalization. However, in the next altcoin season by April 2021, Bitcoin’s dominance dropped below 40%.
The current situation suggests that a comparable scenario may be at play. If the death cross leads to a lasting decline in Bitcoin’s dominance, it could pave the way for growth in the altcoin market.
Nevertheless, Bitcoin continues to dominate inflows. At the time of writing, Bitcoin is trading at $99,750, with a market dominance of 55.8%. However, recently price results of cryptocurrencies such as XRPDogecoin and Solana appear to be threatening this dominance. In turn, Ethereum, the king of altcoins, has not yet manifested similar rally in this series.
Adding to this perspective, cryptocurrency analyst TechDev pointed to the beginning alternative season. His analysis focuses on the six-month candlestick timeframe on the Bitcoin dominance chart, where he indicates that the current candle is the one at which altcoins will make their move. According to TechDev, the current candle coincides with historical moments when altcoins have appreciated in value, citing similarities in 2017 and 2021. He explained that during these cycles, Bitcoin’s dominance has declined in the up-to-date six-month candle after it surpassed its all-time high with previous cycle.
Featured image created with Dall.E, chart from Tradingview.com