- Bitcoin dominance has been on a downtrend ever since Bitcoin topped out at $20,000 in 2017
- Another rejection at the current resistance level looks likely, suggesting that a retrace is coming
- Alts could be in for a promising few weeks, once Bitcoin has retraced
Everyone who was active in the cryptocurrency markets during December 2017 will remember that the best present possible was waking up on Christmas morning to find your alt coins, or your entire portfolio, had doubled in value overnight. After Bitcoin’s sensational rise to $16,000 this year, are the stars aligning for a repeat of 2017 and another alt season for Christmas?
Bitcoin Dominance Dropping Since 2017
As we can see, Bitcoin dominance has been in a general downtrend ever since it topped out at $20,000 in December 2017:
By September 2019 it had managed to reclaim 65% of this lost dominance, but that was the end of the recovery – since then it has been on a consistently downward trend. We are currently witnessing another rejection at the trendline after a two-month rally, during which time Bitcoin has comprehensively outdone last year’s high of $14,000, all of which suggests that a pullback is imminent.
Alt Season Only Possible In a Settled Market
The biggest alt seasons have come when Bitcoin has cooled down after a big move, with 2017 being the prime example. This makes sense as all the money that has been made on Bitcoin flows into alts, moving the entire market. With Bitcoin set to top out soon after enjoying a 350% move since March, the odds of a sizeable alt season on the horizon are very good indeed.
Assuming Bitcoin does retrace soon, what does that mean for a Christmas alt season 2020? Of course we don’t know if Bitcoin dominance it going to retrace in a nice curve like it did between May and October or if it will knock on the door a few more times as in the months prior, but it looks very likely that a retracement ultimately to the support level of 49.5-52% is on the cards:
However it happens the rejection will take time, with alts unlikely to run massively while Bitcoin is actively moving. It is conceivable then to think that we have to wait another few weeks for Bitcoin to ultimately cool off before alts can start pumping in unison, and with six weeks to go until Christmas the appealing prospect of enjoying the festivities in the middle of an alt season is very real indeed.