- Bitcoin dominance last week fell through a three-year upward trendline
- It is now sitting on a critical support level
- Given Bitcoin’s performance this year, we can likely anticipate a Bitcoin run soon
Bitcoin dominance has fallen through a three-year uptrend, resulting in a further huge push from alts. The trendline, which has been in play ever since the end of the January 2018 alt season, has been a dependable place for Bitcoin dominance to bounce following alt rallies, but it appears that the current alt rally has been too strong. It is now sitting at a critical support level, and a Bitcoin bounce in the near future would echo past performance, although a further drop to the low 50s is not out of the question.
Bitcoin Dominance Ends the Trend
Bitcoin dominance has obeyed the trendline that has been in place since 2018, flirting with the it for most of 2021, but last week it failed to bounce as it usually does and instead fell through:
This resulted in a surge in altcoin performance, with almost all in double figures and some making triple figure short term gains recently. The move follows a pattern that has been in play for the past six weeks as Bitcoin has consolidated, allowing alts the space to make serious inroads into its dominance.
We know from past experience however that alt seasons don’t last forever, and Bitcoin’s next move will dictate how much longer the current one goes on for:
The Bitcoin dominance level has fallen to a support line that has been in play since mid-2019, and given that the dominance level has been in almost permanent decline for the first quarter of the year, a bounce of some sort has to be expected soon. The crypto market famously enjoys an inter-market pattern during bull markets, where Bitcoin and altcoins trade purple patches.
Seeing as Bitcoing enjoyed such a barnstorming end to 2020 it’s no surprise to see altcoins having a huge run in the first quarter of 2021, but this won’t last forever, and a near two-year support level would be a sensible place to expect a Bitcoin recovery to take place. If the current support level is maintained therefore, we can expect the Bitcoin dominance level (and price) to consolidate for a while, perhaps throughout April, before embarking on a climb back up towards prior levels and beyond.
However, if the current support level breaks this would precipitate a strong move from alts throughout April and possibly May, with two clear lower support ranges viable as springboards for a recovery:
At points like these it is certainly worth looking to take profits on alts that have enjoyed extraordinary runs and preparing yourself for a Bitcoin recovery. We know it’s coming, we just don’t know when.