Technical analysis of the BTC.D chart is pointing to a point in equilibrium that could lead to a crash in Bitcoin’s crypto market cap dominance.
Analysts at The latest outlook came from crypto analyst Cryptoinsightuk, who highlighted the current status of the weekly Bollinger Bands indicator on the BTC.D chart as a reason why BTC’s dominance is about to experience a massive crash.
Weekly 2017 style Bollinger Bands Flash lineup
According to CryptoInsightsuk, the current compression and positioning of the Bollinger bands resemble the circumstances in which one finds oneself March 2017, a period that preceded a rapid decline in Bitcoin dominance and the start of a powerful altcoin rally season.
The weekly candlestick chart shows Bitcoin dominance near the mid to upper Bollinger Band region pushing around 59%, with the bands now tightening. In previous cycles, especially in 2017, a similar band structure led to a quick crash that pushed BTC’s dominance down for weeks. This is visible in the gray area referred to in the graph below as the ‘starting point of the previous ALT season’.
According to the analyst, this tightening of the Bollinger Bands is expected to result in a downward move that pushes BTC dominance to the mid-30% range. This is highlighted in the chart below as a target range between 30% and 35%, with a middle level of 33.5%.
Liquidity Rotation and the Altcoin Effect
Another crypto analyst known as Bird responded to the analysis noting that charts point to a violent decline in Bitcoin dominance. As noted by the analyst, violent downward moves in BTC.D have always coincided with aggressive liquidity rotation into altcoins. A rapid decline in Bitcoin’s market share is due to more capital flowing into the altcoin market than into BTC.
According to the analyst, once dominance breaks through convincingly, major cryptocurrencies such as Ethereum and XRP will start to gain meaningful market share. Bird specifically noted that XRP could be positioned for a strong move in March and beyond, citing ongoing infrastructure reasons development linked to the Ripple ecosystem.
That said, predictions of a crash BTC’s dominance is not new. Market participants have anticipated the start of a large-scale altcoin season for the past few months. However, Bitcoin’s dominance has remained stableeven during periods of price crashes. This is because periods of outflows from Bitcoin have always led to corresponding outflows from other cryptocurrencies.
At the time of writing, Bitcoin is currently at 57.7%, down 1.34% in the last 24 hours. A breakout above the previous alt-season starting zone in the 60% range could negate the bearish thesis and further extend Bitcoin’s control into 2026.
Featured image from Pixabay, chart from Tradingview.com
Editing process for bitcoinist is focused on providing thoroughly researched, accurate, and unbiased content. We have strict sourcing standards and every page is carefully reviewed by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance and value of our content to our readers.
#Bitcoin #Dominance #Experience #Major #Crash #Expert #shares #Bitcoinist.com