Is The Dropping Bitcoin Dominance The Start Of A New Altseason?

---

As Bitcoin started to hover around $30,000 yesterday (it is up another 5% since), traders wondered what would be the next stop: back to it’s record $40,000 and using the $30k as support, or seeking to retest around $20,000 (which is what we’ve noted a few weeks ago already).

As the Bitcoin price dropped further whilst some altcoins gained ground, the dominance of Bitcoin in the cryptosphere was dropping. Normally, whenever Bitcoin’s dominance drops under a certain threshold, it is said that Altcoin Season is starting.

Market comments

Several technical analysis have in the past few days made similar points, with Global Digital Asset Chief Operating Officer Zachary Friedman saying that he has a certain feeling about a certain coin.

I have a strong sentiment towards ether as a leading indicator for an upcoming alt season.

BTC dominance is dropping as profits are redistributed and ETH sitting just near its all-time high presents an immediate opportunity for new market entrants to diversify their holdings and seek additional yields.

The BTC dominance chart that Tradingview creates, clearly shows that when Bitcoin lost out to DeFi in the summer of 2020, altseason kicked off.

At that time, it was very notable with food coins (remember Sushi) and many DeFi coins that sought all time highs.

As Bitcoin retreats from the $40k point, you can see how it is retesting the 60% line, which is said to be separator between altseason and Bitcoin dominance. If altseason kicks off, better watch out for some of the smaller coins in the next few weeks.

Many people on Twitter are stating that the pump in the Dogecoin price started the altseason.

#dogecoin started the #Altseason 🚀

— Ash WSB (@arshbajwaa) January 29, 2021

Cindy Leow of trading firm 256 Capital Partners said:

Technically, BTC is still in a descending triangle, which is a continuation pattern, showing lower highs and lower lows with currently a floor price at $29,000,” “But if we close daily below [$29,000], could see another sweep of the mid-$20,000s.

amphoto / Depositphotos.com