Since the month of April when the price of Bitcoin first increased by $1,000 within minutes, Bitcoin’s dominance improved. Even though this price action sent the number one asset out of the bear market, the price rally was the result of an increase in altcoin-driven selling not an improvement in Bitcoin investment. The impact can also be observed in Bitcoin’s price outperforming that of most altcoins by miles. Although Bitcoin’s value is dwindling and can be seen in the ratio of most crypto to BTC.
Now that Bitcoin’s rally has started to change as the king of crypto holds on to support, the dominant nature of BTC has dropped. The coin is now at risk of falling further. A breakdown in dominance like this would lead to Bitcoin price falling sharply while other cryptocurrencies will hold their value. On the other hand, Bitcoin price could trade sideways but other cryptos will move into an “alt season” which will make investors happy.
Bitcoin (BTC) Price Today – BTC / USD
Bitcoin Dominance Could Fall Out of the Multi-Month Bearish Wedge
Is alt season approaching? At this point, it is still hard to tell. Although anything is possible. The expectation of an altcoin season has led crypto analysts to encourage retail investors to continue buying the dip in altcoin prices until their bags become extra heavier.
The promise of a crypto bull run has caused these dip buyers to remain strong, and hope that one day the altcoins would outperform Bitcoin by at least 1000% as seen in the past alt seasons. However, as time passes, altcoins have continued to set new lows after lows. Many cryptocurrencies are starting to accept the fact that some digital assets may never reach their all-time highs again even if Bitcoin reaches a new high.
This realization by holders and continued pain as they wait for a bull season have caused the majority of altcoins to capitulate. This can be seen in Ethereum and XRP price charts two of the top assets by market capitalization behind BTC. While the majority of crypto investors predict that there will be “more pain” for some altcoins, often when the overall sentiment is poor and the lows have been swept aside, it is usually the best time to buy.
When Will the Alt Season Begin?
In the event that Bitcoin’s dominance breaks down, the coin’s relevance would drop. Bitcoin’s dominance would have to decline from a multi-month ascending wedge which is a typical bearish action to trigger an altcoin season.
Sideways Action for Bitcoin Will Propel Altcoin Prices
However, if the price of Bitcoin starts to trade sideways, while the altcoins launch a 1000% or more bull run, then we can say that the much-awaited alt season is finally here. It is no secret that ascending wedges usually break upward. When it finally breaks, the current “more pain” scenario could turn to a “max pain” scenario. Whatever the case, everything will depend on Bitcoin’s dominance.