Bitcoin Hits New High, Signals Potential Altcoin Season as Dominance Peaks

Bitcoin’s price surge has reached $97,650, driving its market dominance to 65.70%, the highest since January 2021. Meanwhile, altcoins like Ethereum struggle significantly, with Ethereum’s dominance down to 7.5%. Analysts suggest that Bitcoin’s overwhelming dominance may soon reverse, paving the way for a potential altcoin season as altcoins exhibit bullish patterns despite recent struggles.

As Bitcoin’s price continues to soar, it has reached its highest level since February, stirring speculation about an approaching altcoin season. This surge saw Bitcoin (BTC) rise to $97,650, which is a notable 30% increase from its lowest price this year. Interestingly, Bitcoin’s market dominance has climbed to a hefty 65.70%, the highest it’s been since January 2021.

The market dynamics are quite stark right now. While Bitcoin thrives, many altcoins, particularly Ethereum (ETH), continue to struggle and lag behind. Ethereum’s market dominance has plummeted to 7.5%, significantly down from a high of 22.27% reached in 2022. There’s a disturbing trend as its price is at risk of hitting unprecedented lows when compared to Bitcoin, creating a worrying picture for ETH investors.

The growing strength of Bitcoin dominance is attributed to its current price trajectory—close to its all-time high—while a majority of altcoins have seen steep declines from their 2024 peaks. Notable performers like Ripple (XRP), Cardano (ADA), and Solana (SOL) are down over 37%, 50%, and 51%, respectively, since last November. The overall demand from Wall Street has buoyed Bitcoin significantly, with spot Bitcoin ETFs enjoying substantial inflows, taller than $111 billion with more than $40 billion in new assets.

Looking ahead, however, analysts warn that Bitcoin’s dominance is at risk of retreating soon. Review of the weekly charts indicates that it bottomed out at 38.86% in 2021 and 2022 before rocketing to 65.4%. The trend lines of the 50-week and 100-week moving averages remain above water, and the Average Directional Index is on a bullish rise at 43. Typically, an ADX above 25 signals robust upward momentum.

Nevertheless, serious caution is warranted. Bitcoin dominance has formed a rising wedge pattern, and its Relative Strength Index has hit an overbought level at 74.10. This suggests that we could soon witness a reversal, perhaps as investors begin flocking to altcoins again, particularly when dominance nears the 72.92% mark, a high last seen in December 2022.

On the altcoin side of the spectrum, a fascinating bullish megaphone pattern is emerging, featuring diverging upward trend lines. Recently, the total market cap for altcoins has retreated to the lower range of this pattern, hinting at a possible recovery as bulls push towards the upper boundary. Positive developments continue as many altcoins have successfully created a bullish harmonic XABCD pattern, and it appears the final CD leg is taking shape. As long as the market cap stays above that lower trend line, the prospects for an altcoin season seem more than just hopeful; they appear quite promising.