Altcoins, Bitcoin, Cryptocurrency, News & Updates

Bitcoin Dominance Gears up Deadly Blow Against Altcoins

August 18, 2020

Since the beginning of the year, Bitcoin is up over 70%, and its recent breakthrough resistance at $10,000 helped push altcoins toward even sturdier ROI. More altcoins are up well over a few hundred percent, smothering the first-ever cryptocurrency by a wide margin.

According to a handful of signals on BTC dominance charts, this all could soon reverse, causing bitcoin to outperform the rest of the crypto market vastly.

After Last Year’s Crypto Market Capitulation, Altcoins Outperform Bitcoin in 2020

The first-ever cryptocurrency is bitcoin and anything that came after it is considered an altcoin or a stable coin. Stablecoins are backed 1:1 by USD or another fiat currency and assets to safeguard stable prices with limited changeability. Altcoins can be just about anything, with some designed for smart contracts, others as payment tokens, and several as nothing more than insignificant coins to venture over.

These different types of crypto assets frequently have an inverse or associated relationship, depending on market conditions.

For example, in 2019, when Bitcoin rallied to $14,000 – potentially its next target above current levels – altcoins were decimated in its wake. This year, however, altcoins are soaring, helping to carry Bitcoin higher. Together, the two asset types are propelling, yet Bitcoin dominance has been dropping.

BTC dominance had fallen to 60%, a level that hasn’t be reached in well over a year – before Bitcoin’s bull rally last year that crushed alts into dust.

Altcoins have been making significant recoveries, not only in USD but against BTC. However, after altcoins have spent several months now beating out Bitcoin, dominance metrics are hinting at a sharp reversal that will let the king of crypto catch up against the rest of the market.

BTC.D Daily Falling Wedge and RSI Bullish Divergence | Source: TradingView

BTC Dominance’s Buy Setup Could Send Alt Season To Squawking Halt

On daily price charts of BTC dominance, a TD buy nine setups has appeared. The TD Sequential indicator planned by Thomas Demark is one of the most reliable in the crypto market. The same meter called the top in dominance, sparking the prolonged altcoin season that may be coming to an end. It is only appropriate that the conflicting signal also calls the lowest.

After the signal of 9 sells, BTC dominance plunged over 13% to present-day levels. Coinciding with the accurate sell signal, BTC.D seems to be forming a falling wedge design. Further adding credibility to the possibility of a setback, the Relative Strength Index is displaying a robust bullish deviation.

BTC.D Daily Falling Wedge and RSI Bullish Divergence | Source: TradingView

Technical analysis can be a tool to assist traders, investors and analysts with predicting the highest probability outcome, but it is never a guarantee of future results. Together, a TD 9 buy setup, and a bullish segment and matching deviation on the RSI, a setback is becoming more possible by the day.

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