Bitcoin Dominance Analysis – Is BTC Dominance About To Roll Over and Give Way to a New Alt Season?

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Bitcoin dominance is often closely watched by altcoin traders as they look for any signs to suggest that altcoin season may be underway. You see, typically, when the BTC dominance drops, altcoins start to rally heavily. However, Bitcoin dominance as been rising aggressively in 2019, being able to rise as high as 70% and keeping the altcoin markets suppressed. 

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Nevertheless, BTC dominance may actually be on the cusp of rolling over and falling after showing strength for so long. BTC dominance has not been able to overcome the 70% threshold since September and looks to be making lower lows.

The Bitcoin dominance is a metric that can show Bitcoin’s value relative to the entire cryptocurrency industry as it measures how Bitcoin’s share of the total cryptocurrency market cap.

Bitcoin dominance analysis

What has been going on?

Taking a look at the long term dominance chart above, we can see that BTC dominance had bottomed out during the start of 2018 after reaching the 34% level. It is no surprise that this was the end of the previous altseason as the cryptocurrency markets started to roll-over from their majestic price increases.

Ever since reaching this level of support, we can see that BTC dominance has been increasing for the following 2 years. Dominance reached a high of around 56% during 2018, but this resistance was smashed during 2019. Bitcoin dominance then went on to rise as high as 70% during September 2019. However, after reaching this level of resistance, BTC dominance looks to be shaping up to create lower lows and lower highs. 

Let us take a closer look at the daily charts to gain a closer perspective.

We can see that after reversing around the resistance at 70%, provided by the 1.618 Fibonacci extension level (drawn in green), BTC dominance rolled over and started to fall until finding recent support around the .236 Fibonacci Retracement level at around 66%. 

BTC dominance has started to rebound higher but lacks the momentum for this to be sustained. If BTC dominance continues to fall, we can expect immediate support at the 66% level. If dominance does fall beneath here, we could really expect altseason version 2.0 to start pretty soon as it would suggest that BTC dominance would officially turn bearish. Beneath this, support can be found at 63.96% (downside 1.272 Fib Extension), 63.14% (.382 Fib Retracement), 61.96% (downside 1.618 Fibonacci Extension level), and 60%. 

Alternatively, if BTC continues to surge and remain dominant within the industry, we can expect immediate resistance to be located at 70%. If BTC dominance can continue even further higher, we can expect resistance to be located at 75.65%, 77.97%, and 80%.

Yaz Sheikh

Yaz is a cryptocurrency technical analyst with over seven years of technical analysis trading experience. As an Economics graduate, he has taken a keen interest in the future potential of blockchain in the financial industry. Removing crypto from the equation, Yaz loves to watch his favorite football team and keep up-to-date with the latest fights within the UFC.

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