Bitcoin is well above its previous record high, but the “alt season” was true altcoins explode in value relative to the top ranked cryptocurrency is yet to arrive.
BTC dominance, a measure that weighs all other crypto assets against Bitcoin, represents a crucial monthly close that will reduce the chances of a greater altcoin market recovery. This is why the future of alts like Ethereum, XRP and more hinges on the December 2020 monthly close.
Bitcoin Dominates Crypto Market Interest, Will Altcoin Have you ever returned season?
Rewind to any point in the past three months as a bullish Bitcoin approached $ 20,000, and most crypto analysts out there during the last market cycle fully expected the alt season to occur almost immediately after the top cryptocurrency took out its former all-time high.
That moment has come and gone, but altcoins have only taken a beating for it. Many altcoins are appreciating in USD terms under the guise of positive price growth.
But switch to the same altcoins trade against BTCfew have managed to perform as well as Bitcoin.
Strong Bitcoin as altcoins struggle results in increasing BTC dominance. The total crypto market cap is approximately $ 636 billion, of which Bitcoin currently makes up exactly two-thirds at 66.7%.
At BTC.D’s lowest value ever, altcoins left Bitcoin with only a third of the market share, but the tables have since turned. And with Bitcoin more bullish than ever and with an entirely different asset class behind the capital flowing into crypto, altcoins run the risk of becoming just a fraction of the total crypto market cap.
The MACD indicator will cross bullish with a December close above 66.7% | Source: CRYPTOCAP-BTC.D on TradingView.com
Three technical indicators suggest that BTC’s dominance will rise soon and further crush Alts
The first of the bullish (for Bitcoin) signals that could send altcoins further into a bearish state, is the MACD on monthly installments pictured above. The short-lived DeFi “summer of love” made the histogram red again for the first time since July 2018, but from December the histogram has turned green again.
Coinciding with the histogram turning bullish, there is also a bullish crossover of the two moving averages depicted on the MACD. The last bullish crossover sent dominance from about 40% to 70%, and now another crossover is forming. A monthly close is required to confirm the crossover, so there is still time altcoin bulls to stop big bear Bitcoin from take them down further.
BTC dominance closing above the middle-BB could confirm a move higher | Source: CRYPTOCAP-BTC.D on TradingView.com
Then the Bollinger tires Monthly timeframes also show how in danger of extinction altcoins are currently. A close above or below the centerline moving average can be used as confirmation to buy or sell.
Assets closing off the center line often result in the price action tagging the other side of the band. This means that if December closes above the midline, a retest of the top band and dominance above 70% is likely. If you don’t get through the middle line, that could bring you alt season to the crypto market finally.
Ichimoku is giving bullish signals, but BTC.D must get its head above the clouds | Source: CRYPTOCAP-BTC.D on TradingView.com
But if BTC’s dominance could shut out of the Ichimoku cloud in December, all bets are probably off for altcoins for now. When assets are traded above the Tenkan-Sen (blue line and corresponding arrow), they are considered bullish.
The Tenkan-Sen above the Kijun-Sen is also a signal of this there is a bullish trend going on. The meaning of each crossover is shown with red and green arrows.
Closing above the cloud or “Kumo” on the Ichimoku indicator on monthly installments on BTC.D would be a signal of doom for altcoins. However, the remaining hope is also in the cloud itself.
The Kumo is projecting future price action, and in this case the red cloud may indicate bearish price action for BTC.D. If the December monthly close on BTC.D hits above one of the major levels, expect altcoins to remain bearish compared to Bitcoin. But if things turn around from here, and the closure is under one of these crucial zones, then one the alt season could finally come.
Featured image from Deposit Photos, Charts from TradingView.com