Recent crypto market dynamics in the past four days have seen the return of bullish momentum into many cryptocurrencies, with the Bitcoin price leading the charge. Interestingly, this has led to the projection of looming gains in many altcoins, and technicals suggest an altcoin season might be rolling into place.
Crypto analyst Kevin (@Kev_Capital_TA) recently drew attention to a significant development of a daily death cross in Bitcoin’s dominance. This rare occurrence could mark a shift in cryptocurrency investments in the coming months with implications for Bitcoin and the altcoin market.
Bitcoin Dominance Chart Forms Daily Death Cross
According to a technical analysis of the Bitcoin dominance chart, the leading cryptocurrency is about to form a death cross in the daily candlestick timeframe. A death cross is a technical indicator where a short-term moving average crosses below a long-term moving average, often signaling bearish momentum. On the other hand, Bitcoin’s dominance chart tracks the percentage of the total cryptocurrency market cap represented by Bitcoin, and a decline often signals increasing strength in altcoins.
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In this instance, the daily death cross on Bitcoin’s dominance chart is forming at a macro high for the first time in four years, according to Kevin’s analysis. Interestingly, technical analysis shows that Bitcoin dominance has faced a macro golden pocked rejection two different times in the past three months, a phenomenon that lends further weight to the change in market dynamics if a death cross were to eventually manifest.
What Does This Mean For Cryptocurrencies?
Kevin’s analysis highlights a historical precedent where a daily death cross at a macro high preceded the onset of alt season. Four years ago, in 2021, a similar event occurred on the Bitcoin dominance chart, preceding a shift in market momentum away from Bitcoin toward altcoins. During that time, Bitcoin’s dominance was around 63% of the entire market cap. However, the ensuing altcoin season saw Bitcoin’s dominance drop below 40% by April 2021.
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The current setup suggests a comparable scenario may be unfolding. If the death cross leads to a sustained drop in Bitcoin dominance, it could pave the way for an altcoin market rally.
Nonetheless, Bitcoin continues to dominate inflows. At the time of writing,…
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