- Bitcoin dominance has resumed the uptrend towards 70, casting doubt on a potential altcoin season.
- Ethereum dominance seems to suffer the most when BTC dominance is on the rise.
- Bitcoin is stuck between crucial support and resistance levels.
Bitcoin dominance has been on a consistent recovery mission after rebounding from a November low at 61.01. The index appears to have flipped bullish and is on the way to reclaiming the highs formed in the same November at 67.66. At the time of writing, the flagship’s cryptocurrency’s dominance in the market holds the ground at 64.95 amid a bullish building momentum.
Bitcoin dominance balloons on the peril of altcoins
The 4-hour chart shows the Bitcoin dominance index holding above all the three moving averages; the 50 Simple Moving Average, the 100 SMA, and the 200 SMA. In other words, the index is quite bullish at the time of writing, thus the possibility of hitting 70 before the end of the year.
As Bitcoin dominance in the market shoots up, it implies that altcoins are forced to squeeze even more in the remainder of the market share. The high BTC dominance suggests that altcoins are getting less attention from investors in the market. Consequently, it means that an altcoin season is unlikely in the near term.
Bitcoin dominance chart
Ethereum’s dominance in the market on the verge of further decline
The flagship’s altcoin’s price action has for the longest time-correlated to Bitcoin price. However, the same cannot be said for its dominance in the market. In other words, Ethereum market dominance appears to be inversely related to Bitcoin’s.
Cryptocurrency market dominance by percentage
For instance, on November 30, Ethereum controlled 12.01% of the crypto market share while Bitcoin dominated 62.8%. While BTC has recovered in the last couple of weeks, Ethereum’s dominance in the market has dwindled to 11.92%.
At the time of writing, Ether is trading at $585 after defending support at $580. On the upside, resistance at $600 limits price movement.
It is essential to realize that the increase in Bitcoin dominance in the market continues to affect other altcoins like Ripple, Bitcoin Cash, Tether, and Litecoin. Traders appear to have swayed their attention to Bitcoin as it battles to hit memorable highs above $20,000.
Bitcoin stranded under critical resistance
Bitcoin is at a cross-roads after hitting a stumbling block at $19,500. Bears at all costs have capped trading at levels beyond this zone. On the downside, bulls are not ready to lose the ground above $19,000. The relatively sideways trading shows that a breakout is undoubtedly in the offing.
However, buyers will continue getting exhausted the longer they fight to break above $19,500 without success. Perhaps some of them may start giving altcoins some attention, thus leaving a gap that sellers may explore for losses back to $17,600. Tentative support areas, including the 100 SMA, 50 SMA, and 200 SMA, could also absorb some of the selling pressure, preventing BTC from dropping sharply.
The bearish outlook will be invalidated if Bitcoin spiked above $19,500. The rest of the journey to highs above $20,000 would be more of a rush as the fear of missing out (FOMO) grips the market.