Bitcoin Forms First Daily Death Cross On Dominance Chart In 4 Years, What To Expect Next
Cryptocurrency market dynamics over the past four days have shown renewed bullish momentum across many cryptocurrencies, led by the price of Bitcoin. Interestingly, this has led to many predictions of an imminent altcoin rally, and technicals suggest that altcoin season may be around the corner.
Cryptocurrency analyst Kevin (@Kev_Capital_TA) recently draw attention to Major Developments in Daily Death Cross Bitcoin Dominance. This rare occurrence could mark a shift in cryptocurrency investing in the coming months and cast a shadow on Bitcoin and altcoin markets.
Bitcoin dominates charts forming daily death cross
According to technical analysis of Bitcoin’s dominant chart, the leading cryptocurrency is about to form a death cross on the daily candlestick time frame. A death cross is a technical indicator in which the short-term moving average crosses below the longer-term moving average, usually indicating bearish momentum. On the other hand, the Bitcoin dominance chart tracks the percentage of the total cryptocurrency market capitalization represented by Bitcoin, with its decline generally indicating that altcoins are gaining strength.
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In this case, the daily death cross on Bitcoin’s dominant chart is forming a macro high for the first time in four years, according to Kevin’s analysis. Interestingly, technical analysis shows that Bitcoin dominance has faced rejection from macro gold pockmarks to varying degrees twice in the past three months, a phenomenon that will further exacerbate changes in market dynamics if the death cross eventually occurs.
What does this mean for cryptocurrencies?
Kevin’s analysis highlights a historical precedent of daily death crosses on macro highs prior to the start of an alternative season. Four years ago in 2021, a similar event occurred on the Bitcoin dominance chart, followed by a shift in market momentum from Bitcoin to altcoins. During that time, Bitcoin’s dominance was approximately 63% of the entire market capitalization. However, during the following altcoin season, Bitcoin’s dominance fell below 40% by April 2021.
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Current circumstances suggest something similar may be happening. If the death cross leads to a sustained decline in Bitcoin dominance, it could pave the way for a rebound in the altcoin market.
Despite this, Bitcoin still dominates the inflows. As of this writing, Bitcoin is trading at $99,750 and holds 55.8% market dominance. However, recently Price performance of cryptocurrencies like XRPDogecoin, and Solana appear to be threatening this dominance. On the other hand, Ethereum, the king of altcoins, not yet manifested There has been a similar rally this cycle.
Cryptocurrency analyst TechDev added to this view Point to start Cottage season. His analysis focuses on the six-month candlestick timeframe in which Bitcoin dominates the chart, and he points to the current candlestick as one where altcoins will take action. According to TechDev, the current candlestick is consistent with historical moments of altcoin gains, citing similar situations in 2017 and 2021. He explained that in these cycles, Bitcoin’s dominance declines in a new six-month candle after surpassing the previous cycle’s all-time high.
Featured image created using Dall.E, chart from Tradingview.com
