- Bitcoin topped out at $28,425 yesterday after putting on some $5,000 in three days
- Bitcoin dominance hit 72%, last seen in September 2019
- Alts could enjoy a huge run in early 2021
Bitcoin is catching its breath after an incredible sprint to $28,425, moving a sensational $5,000 in three days. This move has resulted in Bitcoin dominance hitting levels last seen a year ago, and ushers in the potential for a repeat which would see alt coins running in early 2021 as they look to reclaim some of the market share.
Bitcoin Ensures Merry Christmas for Bulls
Having broken through its previous all time high on December 16, Bitcoin has shown nothing but strength during the holiday period, pushing further up into price discovery on an almost daily basis. This culminated yesterday in a wick up to $28,524 before a small correction took place, allowing some short term support/resistance lines to be formed:
With so many expecting a correction following Bitcoin’s consolidation around $22,000-$24,000, where Bitcoin goes from here really is anybody’s guess. It is oversold on all major indicators, while the Crypto Fear and Greed Index has been at ‘extreme greed’ since early November, and yet the buy pressure seems unrelenting.
Of course there will be a correction at some point, but it could well be that the days of the 30% correction are over and Bitcoin’s sudden demand could mean that much smaller corrections become standard, with so many buyers waiting to snap it up.
Alt Season Around the Corner as Dominance Hits 72%
It wasn’t only the Bitcoin price that was taking center stage this week – the Bitcoin dominance too has been on a mission to Mars:
The Bitcoin dominance ripped through one level of resistance at 69% and briefly peeked above 72% before a sharp correction. This echoes the end of 2019, where Bitcoin held all the cards until mid-January 2020:
This collapse in Bitcoin domination led to a great period for alt coins in 2020, and with Bitcoin back at similar levels, are we in for a repeat? To answer this we need to look at the ETH/BTC chart first, which is the bellwether for alt season:
As we can see, Ethereum is coming towards the apex of a huge four-year wedge, with the recent Bitcoin action seeing it bounce perfectly off the bottom trend line. This suggests that Ethereum isn’t willing to give up this trend just yet, despite Bitcoin’s increasing dominance, and that a mammoth alt season for Q1 2021 could well be on the horizon.
Were Ethereum to break above this wedge it would illustrate that it was ready to outperform Bitcoin, after which most if not all big caps would follow, before the gains trickle down to the medium and small caps. Of course, Bitcoin has the ability to derail an alt season with just one lung-busting move, which is why it is always wise to have the majority of your portfolio in Bitcoin.