- Bitcoin’s dominance continues to surprise, pushing toward key resistance levels of 71-72%.
- The ‘Bloody Scenario’ could see altcoins lose 50%-85% as BTC dominance rises.
- The ‘Altseason Scenario’ offers hope for altcoins as BTC dominance shows signs of reversal.
Many analysts have been surprised by Bitcoin’s dominance in the crypto market. With dominance at 71-72%, it has been considered critical by analyst Egrag, who previously doubted its achievement. As BTC approaches this milestone, Egrag anticipated that the market has two scenarios, which could lead to an altcoin revival or further decline.
In an X post on Tuesday, Egrag painted two different pictures of the market’s future. The first one is known as the ‘Bloody Scenario’, which assumes that Bitcoin will take most of the liquidity and cause the dominance rate to range between 70% and 73%.
If this persists, altcoins could experience further erosion of their value since many are already in the depths of the 2022 bear market. This would put much negative pressure on any trader hoping that particular altcoins would gain momentum.
Potential Altcoin Corrections
In this case, altcoins that could have deeper corrections may include Ethereum (ETH), XRP, Solana (SOL), Hedera (HBAR), Stellar (XLM), Polkadot (DOT), Binance Coin (BNB), Cardano (ADA), and TRON (TRX). Still, if BTC’s dominance is to increase, anything from 50% to as much as 85% loss might be feasible.
Egrag identifies the second one as the “Altseason Scenario” which is much more positive than the previous one. He also identified a bearish divergence on the weekly Relative Strength Index (RSI) which suggests the BTC dominance will soon start a reversal. The BTC market is currently dominating the market and making new higher peaks, whereas the RSI making lower peaks usually indicates a shift in trend. If this materializes, then altcoins will have a rare opportunity to rise again to the surface.
Related: BTC Price Analysis: Key Indicators Point to a Critical Shift
To experience an uptrend, altcoins will require an increase in the bitcoin price to help them pump, while a declining btc dominance also plays a significant role in this process. This will help small cryptocurrencies get back into action as they may start an altseason people have been waiting for so long. Most traders are waiting for this moment, as experience has demonstrated that when BTC drops its dominance, the rest of the coins experience a sharp increase.
