- Alt season could soon be over if the Bitcoin dominance chart plays out as expected
- Bitcoin has been pushed down in 2021 but it has cleared significant resistance
- Alt season should return later in the year, possibly after Bitcoin hits $75,000
Altcoin holders have enjoyed dramatic returns in the first two months of the year, but the Bitcoin dominance chart shows that the daddy of cryptocurrencies could be about to smash down the door and remind them who’s boss. What are the levels we need to look out for and what does a rise in Bitcoin dominance mean for alts long term?
Bitcoin Dominance has Overcome Critical Resistance
Bitcoin dominance level was steadily dropping since the turn of the year, which has led to altcoins enjoying incredible returns. However, since touching the support level in mid-February, Bitcoin has threatened to reverse this action, although it has been constantly beaten back by resistance at 62.7%:
As we can see, Bitcoin dominance has been building strength for the past month, forming a baseline from which it looks to be on the verge of expanding north. Crucially, it has now spent two days above the 62.7% resistance level. If it can retain this level then a move back up to the 70% area looks likely. However, the margins are slim as it is only just remaining above this level, so further confirmation is needed before you should think about ditching alt coins for Bitcoin.
Alt Season Will Be Back and Bigger Than Ever
The pattern is even more obvious if we look at the Bitcoin dominance chart on a higher timeframe:
It’s clear from this weekly chart that Bitcoin is gearing up to move up to the range highs of 70-72%, which could well see us topping out temporarily at around $75,000 in early summer before a huge altcoin renaissance. Falling back underneath the 62.7% area would not be too significant in itself, with only a breaking of the three-year trendline being worth paying real attention to as this could lead to Bitcoin dominance testing levels not seen since 2019 and maybe 2018.
The chances of seeing this kind of alt season after experiencing huge gains for the first two months of the year is unlikely, but if the Bitcoin dominance cannot clear that 72.5% barrier on its next run then we could be in for something along those lines later in the year.
