Why Bitcoin Dominance Hints At A Surprise Altcoin Season Ahead

Tony "The Bull" Severino

1 year ago

3 mins read

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Over the last month, a coordinated attack against altcoins by the US SEC caused Bitcoin dominance to surpass 50%. Above the psychological level makes BTC more valuable as a whole than the entire crypto market.

However, a technical signal has appeared that in the past put in a peak in BTC.D and suddenly sparked a reversal in altcoins. Here is a closer look at the signal and why a surprise alt season could be right around the corner.

Bitcoin Dominance Beats All Other Crypto Combined

Bitcoin dominance is a metric that measures the top cryptocurrency’s market cap against the weight of everything else in the space. It is often used as a barometer of health in altcoins, specifically when it’s better to be in BTC, or in alts like Ethereum, Litecoin, or Solana.

When BTC.D is falling and the market is healthy, altcoins outperform Bitcoin in terms of alpha. But as high beta assets, alts are significantly more volatile. As a result, when the market is crashing, they suffer much more drawdown by comparison and BTC’s market share becomes increasingly dominant.

This is precisely the case all throughout 2023. Altcoins have taken a beating, but Bitcoin has held its ground. This divergence across the different types of cryptocurrencies has caused the total market cap of BTC to surpass all other coins combined. 50% dominance is clearly an important level. However, it’s a reading on the Relative Strength Index that’s particularly notable.

Will dominance be rejected? | BTCUSD on TradingView.com

The BTC.D Signal Hinting At A Surprise Altcoin Season

The Relative Strength Index is a momentum measuring tool, which tells traders when an asset is overbought or oversold. In crypto, assets can stay overbought or oversold for extended periods of time. But in BTC.D, on weekly timeframes, historically it hasn’t spent much time at overbought conditions. In fact, it has only reached overbought a handful of times.

This latest push into overbought territory has reached a reading that in the past put the peak in for Bitcoin dominance and immediately turned around into an epic altcoin season. This setup last appeared in late 2019 when BTC.D was at 70%.

With such overbought conditions, combined with an Elliott Wave count indicative of a five-wave move coming to an end, an altcoin season might not be as far away as most are expecting. Although altcoins outperform in an alt season, hence the name, they require a bullish Bitcoin to bait retail to the market.

With BTC beginning to show bullish signs once again, how long until altcoins follow and ultimately outperform?

This chart originally appeared in Issue #10 of CoinChartist (VIP). Get 10% off a year subscription with this link: https://coinchartist.substack.com/NEWSBTC

Tony is the author of the CoinChartist (VIP) newsletter. Follow @TonyTheBullBTC & @coinchartist_io on Twitter. Or join the TonyTradesBTC Telegram for daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from iStockPhoto, 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.

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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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