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For the fifth time since its 2019 rally began, Bitcoin has dipped back into the four figure price range. The move has not been unexpected, however it is clear that this bull run has exhausted its supply of buyers for now. If BTC dominance declines, will it be a chance for the altcoins to shine?
Bitcoin Dominance At Resistance
Bitcoin dipped back to just below $9,800 during the day’s Asian trading session. Over the next few hours it returned to $10k, but failed to register any significant gains above this psychological barrier. The digital asset has now returned to similar levels last week but remains range bound for now.
The fear is that the correction is not over and another lower low may well confirm that. Analysts on crypto twitter are currently targeting $9,500 as the next support level. A break below that would see BTC back at $9,100 pretty quickly.
In all previous market cycles this year Bitcoin has dominated the movements and the altcoins have blindly followed like the digital lemmings they are. With very little momentum for the majority of them BTC dominance shot up to a two year high of 71.5% earlier this month according to Tradingview.
At the moment it has dipped back below 70% and according to crypto investor ‘WelsonTrader’ is now at resistance.
“#Bitcoin dominance is currently at resistance, and will likely drop soon.
#Altcoin market cap is at support, and will likely bounce.
This, along with some other things I’ve tweeted about is why I think Alts will pump, and $BTC will crash.”
https://twitter.com/WelsonTrader/status/1164429607006810112
There have been calls for an altcoin revival all year but as yet nothing has come to fruition. Even the top performers of the year, Litecoin, Binance Coin, and Chainlink are starting to lose their luster as gains get eroded.
Crypto Markets Vulnerable
At the moment Bitcoin and its brethren look vulnerable as a further $5 billion was dumped over the past 24 hours. So far this week over $20 billion has been outflow which equates to 7% of the crypto market. Total market capitalization has returned to the same level it was at last Thursday which is around $260 billion.
Right now, the altcoins do not look like making any moves in opposition to their big brother. Ethereum has hit support at $185 and remains there, XRP is very weak below $0.30 and Bitcoin Cash has dropped below $300.
If Bitcoin dominance does fall from resistance there must be a re-entry into altcoin positions for their market share to increase. Many are still at rock bottom prices so could provide a greater risk/reward ratio at the moment, but only time will tell.
Image from Shutterstock
