Bitcoin Dominance In December: Why The Future Of Altcoins Hinge On This Month’s Close

Tony "The Bull" Severino

4 years ago

4 mins read

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Bitcoin is well above its former all-time high, but the “alt season” where altcoins explode in value relative to the top-ranked cryptocurrency has yet to arrive.

BTC dominance, a metric weighing all other crypto assets against Bitcoin is facing a pivotal monthly close that could jeopardize any chances of a greater altcoin market recovery. Here’s why the future of alts like Ethereum, XRP, and more, hinges on the December 2020 monthly close.

Bitcoin Dominates Crypto Market Interest, Will Altcoin Season Ever Return?

Rewind to any point over the last three months as a bullish Bitcoin approached $20,000, and most crypto analysts who were around during the last market cycle, fully expected alt season to happen almost immediately after the top cryptocurrency took out its former all-time high.

That moment has come and gone, yet altcoins have only been taken a further beating for it. Many altcoins are increasing in USD value, presenting the guise of positive price growth.

But switching over to the same altcoins trading against BTC, few have managed to perform anywhere near as well as Bitcoin.

A strong Bitcoin while altcoins struggle, results in BTC dominance increasing. The total crypto market cap is roughly $636 billion, of which Bitcoin makes up exactly two thirds currently at 66.7%.

At the lowest reading of BTC.D ever, altcoins left Bitcoin only with a third of the market share, but the tables have since turned. And with Bitcoin more bullish than ever and with an entirely different asset class behind the capital pouring into crypto altcoins are at risk of becoming only a mere fraction of the total crypto market capitalization.

The MACD indicator will cross bullish with a December close above 66.7% | Source: CRYPTOCAP-BTC.D on TradingView.com

Three Technical Indicators Suggest BTC Dominance Will Soon Soar, Crush Alts Further

The first of the bullish (for Bitcoin) signals that could send altcoins further into a bearish state, is the MACD on monthly timeframes pictured above. The short-lived DeFi “summer of love” turned the histogram back red for the first time since July 2018, but as of December, the histogram has turned green again.

Coinciding with the histogram flipping bullish, there’s also a bullish crossover of the two moving averages depicted on the MACD. The last bullish crossover sent dominance from roughly 40% to 70%, and another crossover is forming now. A monthly close is required to confirm the crossover, so there’s still time for altcoin bulls to stop big bear Bitcoin from swatting them down further.

BTC dominance closing above the middle-BB could confirm a move higher | Source: CRYPTOCAP-BTC.D on TradingView.com

Next, the Bollinger Bands on monthly timeframes are also showing just how in danger of extinction altcoins are currently. A close above or below the middle-line moving average can be used as a confirmation to buy or sell.

Assets closing beyond the middle-line often result in the price action tagging the other side of the band. This means that if December closes above the middle-line, a retest of the top band and over 70% dominance is likely. Failing to close through the middle-line, could bring alt season to the crypto market finally.

Ichimoku is giving bullish signals, but BTC.D must get its head above the clouds | Source: CRYPTOCAP-BTC.D on TradingView.com

But if BTC dominance can close outside of the Ichimoku cloud in December, all bets are likely off for altcoins for the time being. When assets trade above the Tenkan-Sen (blue line and corresponding arrow) they’re considered bullish.

The Tenkan-Sen above the Kijun-Sen is also a signal that a bullish trend is underway. The significance of each crossover is depicted with red and green arrows.

Closing above the cloud or “Kumo” on the Ichimoku indicator on monthly timeframes on BTC.D would be a signal of doom for altcoins. The remaining source of hope, however, is also in the cloud itself.

The Kumo projects future price action, and in this case, the cloud being red potentially hints at bearish price action ahead for BTC.D. If the monthly December close on BTC.D ends up above any of the key levels, expect altcoins to remain bearish compared to Bitcoin. But if things reverse from here, and the close is below any of these crucial zones, then an alt season could finally be coming.

Featured image from Deposit Photos, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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