Aside from a few rare outliers, owning Bitcoin has been the better investment in recent years compared to other cryptocurrencies. Altcoins like Ethereum and others have only recently caught up, and BTC’s dominance has maintained the lion’s share of the crypto market.
However, the dominance has lost a major trend line that goes back four full years to the peak of the last bull market, and it could suggest a major reversal in the crypto market. Would this be the altcoin season that crypto investors have been waiting for?
Bitcoin dominance is losing crucially Bear Market trend line
Related reading | Five signs that the Altcoin season hasn’t even started yet
Those investors eventually learned the hard way that there is no substitute for Bitcoin. Altcoins fell as much as 99% in most cases, while Bitcoin wiped out only 84% of its profits by comparison. Both scenarios are now well into the back sight, and Bitcoin has had an impressive lead ever since.
BTC dominance has lost an important monthly trendline dating back to the top of the last bull market | CRYPTOCAP-BTC.D on TradingView.com
At the height of that fever, dominance only reached 35%, but has since remained around or above 63%. That key level was lost at the same time that there was a crucial trend line, and it could be now no over-performance in Bitcoin for the coming year or longer.
The trendline in question dates back four years to the peak of the bull market and has maintained dominance ever since.
Altcoins are ready to explode if dominance continues to dive
A zoomed in view shows how many times BTC dominance tried to reclaim the line | CRYPTOCAP-BTC.D on TradingView.com
The disappearance of the previous long-term trend line resulted in some short-term consolidation, followed by a major decline. A bearish retest of 70% BTC dominance failed, causing the major crypto market metric to fall back to the second ascending trend line.
Related reading | Altcoin season is here: “Buy Crypto” trumps Bitcoin searches on Google
With the 63% level now also lost, BTC’s dominance should lean towards the middle of 50%, allowing altcoins to rise compared to Bitcoin for a longer period.
Altcoins could also theoretically hold up better in a broader correction, but that scenario is unlikely as riskier assets tend to be more volatile and more sensitive to greater sell-offs in the crypto market.
Featured image from Deposit Photos, Charts from TradingView.com