- Bitcoin dominance continues to rise, defying expert predictions and putting intense pressure on the altcoin market.
- If BTC dominance hits 70-73%, altcoins like ETH, XRP, and SOL could suffer massive losses, dropping between 50% and 85%.
- A bearish divergence on BTC’s weekly chart hints at a potential altseason, but uncertainty keeps investors on edge.
The dominance of the Bitcoin in the crypto marked has gone high and it has created a shock even for the experts. In this case, it might take some time before people can start concerning themselves with new coins since BTC continues to dominate the market as many expected it to begin sinking after some time.
In a recent X post, Egrag presented his point of view on X and revealed two potential outcomes of Bitcoin domination. Both options paint a completely different picture of the future developments of altcoins with one offering a continuation of the negative trend, and the other hinting at a possible relief rally.
Bitcoin Liquidity Surge
In the first scenario, there will be a concentration of most of the market liquidity in bitcoins, thereby reaching the range of 70-73%. Consequently, altcoins can remain under pressure; some of them are as low as their 2022 bear market bottoms. Mid to large cap coins such as Ethereum, Ripple, Solana, Hedera, Stellar, Polkadot, Binance Coin Cardano and Tron are most in danger given the situation. Some of these coins could further decline in value between 50% and 85%, thereby leading to heavy losses for investors.
This would be a worst case scenario which would compel the trader to reconsider his strategies. If the Bitcoin’s dominance index keeps going up, it will be difficult for the altcoin market to gain stability in the short run.
Potential Market Reversal
The second case scenario is still rather brighter and even speaks about the possibility of the occurrence of changes at least in some significant factors affecting the market. Egrag understanding brought a note to light that BTC is forming a bearish divergence on the weekly chart and this is evidence of an alting hen. The technical analysis reveals that Bitcoin dominance has been recording higher high while the Relative Strength Index (RSI) records lower high. This signals that a bearish market may be in the making in the near future.
If this continues to happen, Bitcoin may be able to rise higher for price but at the same time decreasing its dominance so that capital can participate in altcoins. This scenario could trigger the ‘Altseason’, a period of time where all other cryptocurrencies benefit and surpass the performance of BTC. Some investors expect such a change to happen but the level of risk is still up in the air.