Bitcoin Dominance: Is a Crypto Market Shift Imminent?

Key Points to Consider

Recent market conditions showed strong bullish momentum, with Ethereum approaching the $4,000 resistance and Bitcoin recovering to $112,000. However, analysis of Bitcoin Dominance (BTC.D) suggests that altcoins might not sustain their rally.

Ethereum [ETH] faced rejection near $3,941. On-chain activity remains high, potentially driving demand for ETH. Despite bullish predictions, such as Tom Lee’s $6,000 target, selling pressure persists.

Given this selling pressure on Ethereum, it's crucial to examine Bitcoin Dominance (BTC.D) and altcoin market capitalization to assess whether altcoin traders should consider taking profits.

Bitcoin Dominance and Altcoin Market Cap Analysis

The altcoin market capitalization has been range-bound between $1.34 trillion and $1.54 trillion since July. Currently, it sits at $1.5 trillion, leaving limited room for expansion before reaching the range's upper limit.

Traders should anticipate the range to persist until a clear breakout occurs. Prematurely betting on breakouts can lead to losses. A move beyond $1.54 trillion is needed before confidently predicting further gains.

Bitcoin’s recent recovery from $113.1K fueled an altcoin surge, led by Ethereum. However, altcoin traders in long positions might consider securing profits now.

Bitcoin Dominance (BTC.D) Signals

The BTC.D chart has also traded within a range over the past three weeks and is currently at a local support level. A bounce from this level would signal Bitcoin outperforming altcoins.

Ethereum is expected to potentially reach new all-time highs, supported by strong corporate demand. However, this may not happen immediately.

Given the current dynamics in altcoin market cap and BTC dominance, risk-averse traders might prefer to take profits rather than speculate on an imminent breakout.

Disclaimer: This analysis does not constitute financial advice.