Crypto Currents: Altcoin Surge Amidst Bitcoin Dominance Dilemma
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Bitcoin, symbolized by the ticker BTC, has encountered a decline, settling at $44,014, casting a shadow on its recent bullish trajectory, according to a recent analysis. In a post shared on X (formerly Twitter) on December 9, Matthew Hyland, a notable analyst and social media commentator, adopted a more cautious tone regarding BTC's price movements.
There is a potential breach of a crucial level in Bitcoin dominance
Despite Bitcoin bulls maintaining their momentum and achieving new 19-month highs of $44,729 on Bitstamp on December 8, Hyland discerned ominous signs suggesting potential turbulence for the ongoing bull run. Notably, he highlighted Bitcoin's dominance in the overall crypto market cap, emphasizing a bearish divergence and the possibility of a shift in trend.
BTC/USD 1-hour chart. Source: TradingView
In his X post, Hyland underscored the significance of Bitcoin's dominance level, pointing out that a break and close below 51.81 could signal the first lower low in over a year, potentially marking the end of the uptrend and signaling a likely market top.
Bitcoin crypto market cap dominance annotated chart. Source: Matthew Hyland/X
He referenced the recent spike in Bitcoin dominance on December 6, reaching 55.26%, its highest level since April 2021. However, a rapid turnaround saw the dominance drop to 53.4% at the time of writing.
Bitcoin crypto market cap dominance 1-week chart. Source: TradingView
Altcoins further increase their intraday profits
The potential reversal in Bitcoin's dominance has prompted some to anticipate a substantial rally in altcoins, commonly referred to as "altseason." This sentiment gained momentum as the top 10 cryptocurrencies, including Cardano (ADA) and Avalanche (AVAX), witnessed significant gains of 22% in 24 hours. Altcoins, spearheaded by ADA and AVAX, demonstrated gains exceeding 50% for the week.
ETH/USD 1-day chart. Source: TradingView
Trader Jacob Canfield, in commentary on December 6, observed that even a modest 2% drop in Bitcoin dominance triggered noteworthy activity in altcoins, hinting at the possibility of an intensified alt season as dominance continues to decline.
Altcoin market cap 1-day chart. Source: TradingView
While Bitcoin's dominance fluctuated, the broader altcoin market cap surged by 2.4% on the day, contributing to a month-to-date gain of 18.4% in December. This shift in dynamics fuels expectations for a potential altcoin rally in the days ahead, adding an element of anticipation to the evolving crypto landscape.
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