Since April of this year when Bitcoin first spiked over $1,000 in a matter of minutes, sending the first-ever crypto asset out of its bear market depths, Bitcoin dominance has soared, indicating that much of Bitcoin’s rally was fueled by altcoin-driven selling. The impact can be seen in both Bitcoin’s price outperforming most altcoins by a large sum in USD, and in the dwindling value relative to Bitcoin in most altcoin’s ratio to BTC.
But as Bitcoin’s rally begins to turn around, and the king of crypto teeters on support, BTC dominance – a metric that is used to show Bitcoin’s value in comparison to the rest of the crypto market is in danger of dropping out of a multi-month formation. Such a breakdown in dominance would either lead to Bitcoin falling sharply while altcoins held their value, or Bitcoin could trade sideways while altcoins finally move into the full-blown “alt season” crypto investors have been clamoring for.
Bitcoin Dominance At Risk of Falling Out of Multi-Month Bearish Wedge
Alt season. At this point, it’s become a meme across the cryptoshere. It’s long been the carrot crypto analysts dangle in front of retail investors encouraging them to continue to buy the dip in altcoins until their bags get heavier and heavier.
Related Reading | Bitcoin and Altcoin Crashes Correlating Could Be Catalyst for Alt Bottom
The promise of alt season has caused dip buyers to stay strong, hoping that someday their altcoins outperform Bitcoin by as much as 1000% as was seen in previous alt seasons. But as time goes by, and altcoins continue to set low after low, many are starting to come to terms with the fact that some altcoins may never again reach their all-time high, even if Bitcoin sets a new one.
The realization and continued pain altcoin holders have endured have caused most altcoins to capitulate, as can be seen in the price charts of Ethereum and Ripple – two of the top crypto assets by market cap, second and third to only Bitcoin.
And while most crypto investors expect “more pain” to come for altcoins, oftentimes when sentiment is this poor and lows have been swept, the time to buy is finally here.
Is Alt Season Finally Here, or Will “More Pain” Scenario Play in Crypto Markets
If Bitcoin dominance breaks down from the multi-month ascending wedge it has formed – typically a bearish structure – then BTC dominance could collapse and an alt season could result.
I'm not going to say it pic.twitter.com/xdT2vQhJnM
— The Crypto Dog? (@TheCryptoDog) August 19, 2019
Altcoins and Bitcoin often move correlated, but most of 2019 they couldn’t have been more different in their price trajectory. Should Bitcoin fall hard from here, and altcoins hold their value, a drop in BTC dominance could be seen, but it’s difficult to call altcoins holding their value in USD to be much of an alt season.
Related Reading | Crypto Investors Believe There’s More Pain Ahead For the Altcoin Market
However, if Bitcoin trades sideways, while altcoins go on a 1000% or more run, then the alt season everyone has been waiting for will finally be here.
What if LOL pic.twitter.com/hQXq2sO2po
— The Chonky One (@ChonkyOne) August 19, 2019
Ascending wedges have occasionally been known to break upward, and if it does, the “more pain” scenario could become a “max pain” scenario, with a sell-off in the altcoin space that makes the selling thus far look like a dry run. But it all depends on Bitcoin and BTC dominance, and the days ahead are critical.