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Bitcoin dominance broke down recently from a long-term trend line, potentially signaling that an altcoin season would soon be upon us.
However, Bitcoin’s latest surge ahead of its halving has caused BTC dominance to reclaim the trend line, leaving altcoins vulnerable to another devastating leg down.
BTC Dominance Reclaims Lost Trend Line, Alts May Be In Trouble
Last night’s weekly close for altcoins may have been the most important in crypto market history, but unfortunately for altcoins, Bitcoin‘s latest explosive rally has caused BTC dominance to do what it does best and dominate altcoins like Ethereum and XRP.
Related Reading | Altcoins Face The Most Important Weekly Close in Crypto History
Weeks ago, Bitcoin dominance lost a key trend line that has been valid and respected since 2018 when the crypto hype bubble popped, and the altcoins across the board deflated.
Bitcoin fell by 84% to its bottom and has nearly regained half of the lost ground. Altcoins, however, are still down by 90% or more in most cases. Many dropped by over 99%.
The recent surge in altcoins, combined with a massive surge in trading volume and BTC dominance losing a critical line gave hope to altcoin bag holders that the next alt season could cause these battered and beaten altcoins to shine with stimulus checks coming in.
However, BTC dominance losing the line appears to be a false breakdown from an even larger formation – a formation that could leave altcoins vulnerable to another leg down.
Bitcoin Dominance Forms Ascending Triangle, Is This For Altcoins?
BTC dominance not only has reclaimed the key level, but it appears to have formed a massive, multi-year ascending triangle.
These powerful bullish patterns typically break upward, but not oftentimes experience a false breakdown prior to the final breakout direction.
They’re most often found as continuation patterns but can form at bottoms just as it did when Bitcoin was trading at $3,200. It was this type of pattern that sent Bitcoin from those lows to over $13,000.
Making matters worse, on the total crypto market cap price chart sans BTC, the total altcoin market cap can be seen reaching downtrend resistance, yet failing to close a candle outside of the deadly trend line that has kept their prices in a downtrend for over tw0 years.
Bitcoin’s halving is in less than two weeks, and the volatility expected surrounding the event could spell disaster for altcoins, that typically respond poorly to Bitcoin surging or crashing.
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It’s Bitcoin trading sideways that allows altcoins to flourish, but that may not be happening for some time coming, according to Bitcoin dominance charts and the generally bullish sentiment surrounding Bitcoin’s halving.
Altcoins have nowhere near the same benefits going for them, which could let Bitcoin further outperform in the months ahead.
Featured image from Pixabay
