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Home Cryptocurrency news

Bitcoin Dominance Bear Flag Nears Breakdown, But 58% Level Remains Barrier To Altcoin Season

Tony Spilotro by Tony Spilotro
8 months ago
in Cryptocurrency news, Bitcoin
Reading Time: 2min read
btc dominance altcoin season
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A bearish chart formation has appeared on Bitcoin dominance that could lead to another leg down and rebound in altcoin/BTC pairs. However, the 58% level could remain a barrier, keeping a full-blown altcoin season from occurring for quite some time longer.

Bitcoin Dominance Forms Bear Flag, Hanging By A Thread On Channel Support

BTC dominance is a metric that weighs Bitcoin’s market cap against the rest of the cryptocurrency space. It not only can act as an indicator as to the health of Bitcoin and altcoins separately, but it also can be used to predict when any deviations between the two types of crypto assets are occurring.

The two types of crypto assets are sometimes tightly correlated, while other times when Bitcoin pumps, altcoins dump hard.

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Related Reading | Data Shows Bitcoin More Likely To Pump Following Consolidation, 20% Move Anticipated 

Altcoins have been struggling to recover ground lost against Bitcoin in 2019. The first-ever cryptocurrency went on a parabolic rally, while altcoins were decimated due to regulatory uncertainty and negative sentiment.

bitcoin dominance btc altcoin season

BTC.D 3D (Calculated By TradingView) | Source: TradingView

BTC dominance topped out nearly one year ago and has been on a steady decline since. Recently, two small timeframe rallies made it look like altcoins would bleed further, but the price action has since formed a bear flag on the 3-day timeframe.

Bear flag target measurements take the length of the initial flagpole and add it to the breakout of the trendline. According to the price action, this would send BTC dominance to the 58% level.

58% Level in BTC.D Holds Key To Incredible Return of Altcoin Season

Price action reaching the 58% level in BTC.D has always resulted in a strong reaction. Breaking through that support level in 2017, led to the lowest point in BTC.D history, at 35%.

Related Reading | Bitcoin Leads Poll With Public Predicting ‘Best Performing Asset in 2020’

A bounce at that low sent BTC.D back to the 58% level, and after some consolidation, a breakout of support turned resistance sent BTC.D to 73% at the local high.

BTC.D Weekly (Calculated By TradingView | Source: TradingView

If the bear flag takes BTC.D back down to the clearly important level, another reaction may occur. After nearly two years, a return to the level could cause a short-lived bounce. Another fall from there would form the right shoulder in a massive, multi-year inverse head and shoulders chart pattern.

A breakdown of this bearish structure would lead to a guaranteed altcoin season. Altcoins would soar against BTC on their trading pairs as a result.

And if any new altcoin season is anything like last time, it wasn’t uncommon for these assets to go on rallies of a thousand percent or more against the first-ever cryptocurrency.

Tags: altcoinsbitcoinbitcoin dominancebtcbtc dominancebtc.dbtcusdBTCUSDTcryptoxbtxbtusd
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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