Here’s Why the Market Can Expect an Altseason

Bitcoin’s market dominance is currently in a precarious position. Recent analysis posted by ZAYK Charts on X shows a significant pattern in the Bitcoin dominance chart (BTC.D). The chart displayed in a weekly timeframe, reveals a rising wedge formation. This technical pattern, known for its bearish implications, suggests a potential breakdown in Bitcoin’s dominance. As a result, the cryptocurrency market could see an altcoin pump if this scenario unfolds.

The rising wedge formation consists of two converging trend lines. The upper trend line rises at a slower pace compared to the lower trend line. This pattern indicates a potential reversal or breakdown once the wedge is complete. At press time, Bitcoin dominance stands at approximately 55.32%. The chart projects a possible drop in dominance by about 7.62%, translating to a 13.91% decrease. This would bring Bitcoin dominance down to around 47.70%.

Such a decrease in Bitcoin dominance often signals a shift in market dynamics. Investors might move their capital from Bitcoin to altcoins, leading to an altcoin pump. This shift can result in an increase in altcoin prices and market capitalization. A breakdown from the rising wedge in Bitcoin dominance is expected to trigger this movement.

The implications of this scenario are significant for both Bitcoin and altcoin investors. For Bitcoin, a decrease in dominance suggests that its market share is reducing relative to the overall cryptocurrency market. This reduction could occur if Bitcoin’s price remains stagnant or falls while altcoins perform better. For altcoins, a reduction in Bitcoin dominance is generally positive.

Historical trends underline the importance of this pattern. During past altseasons, significant drops in Bitcoin dominance preceded massive rallies in altcoins. The chart highlights key periods like Altseason 2017 and Altseason 2021, where BTC dominance fell sharply, leading to substantial gains in altcoins. The current rising wedge hints at a potential Altseason 2024, signaling a similar market shift.

A breakdown below the lower trend line of the wedge will be a critical indicator. This move would likely confirm the anticipated decrease in Bitcoin dominance and the corresponding rise in altcoin activity.