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BTC.D has shown unrelenting strength for 2+ years
Bitcoin dominance has essentially only gone up in the last few years. ALTs have suffered tremendously with several coins making a new ATL just this year. Hive, for example, made it's lowest point just some weeks ago which meant that we had 3 years of bear! So far we have had two strong alt seasons in 2017 and 2021 lasting around a year. If this cycle repeats we are about to enter another alt season and there is a good indicator int he BTC.D chart to signal this trend change.
First, here is a post from several months ago that had a look at this chart:
Back in summer the ratio was just about to hit an important resistance that could have signaled a trend change. On hindsight it seems more obvious why this resistance was broken and BTC.D is now at almost 59%! It simply has taken 3 years to reverse this trend and in summer this year it had only been around 2 and a half.
Update
This chart has a lot of details, but bear with me. First, we can see the phases shown in color. Interestingly, for this cycle we did not have a "consolidation phase" as shown in yellow for 2020. Dominance levels just kept going up this cycle and have created a rising wedge (shown in purple). We can see some horizontal resistances at current levels as well as at around 70%. And the dotted blue lines have been the former resistances that have been broken.
2 main factors for a trend reversal
- The first one being time: it has generally taken 3 years for the alt season to kick in. This would mean just like previously a transition at new year 2025/2026.
- The other one is the rising wedge: rising wedges have a tendencies for signaling a trend change as price is often rejected at the tip and then falls down. Currently, price is above the wedge, but this could be a fake out.
Conclusion
A trend change is a 'comin. It has to, right? If so, the chart also gives us a nice target of how low BTC.D could fall: the previous lows give us a supporting trend line at around 42% for the end of 2026. It almost seems to obvious and perfect which could be why it won't play out like that. But I am at least confident that alts will start to take off in the coming months.
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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