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Endangered by Altcoins: Bitcoin Dominance Index Dropping

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Throughout 2019, and even during the 2018 bear market, the allure of an “alt season” has kept crypto enthusiasts and traders buying each dip in the altcoin market.

Meanwhile, Bitcoin’s recent consecutive losses and frequent failures at key resistance have shifted risk in favor of a further drop.

The last several days have been fairly turbulent for Bitcoin’s price. Its value surged from around $8,150 to $8,800 in a few days and lost all of its gains in a devastating red hourly candle, which brought its price back to about $8,300. 

Presently, crypto analysts are drawing a comparison with Bitcoin’s trajectory in 2017, which led to the largest “altcoin season” to date.

Bitcoin’s dominance index has also dropped over the past couple of weeks, and it now stands at 66.4%.

Altcoin Season In Sight?

Past performance shouldn’t be taken as an indicator of future growth. However, it is vital to consider historical data when identifying critical moments in Bitcoin’s price and the movements of various altcoins.

A prevalent cryptocurrency influencer on twitter made a comparison between the performance of BTC and altcoins now and back in 2017.

CryptoBull tweeted that the 2017 “altcoin season” began right after Bitcoin dipped from $1,300 to $900.

Another Twitter user, Crypto Michael, pointed to January 2016, suggesting that a new bull market could be imminent. He argues that Bitcoin finding its bottom and starting to move up sluggishly is “always theCryptoMichNL best environment for altcoins.”

Meanwhile, altcoins have put in a mixed showing, with some slight marking gains, while others are down a bit. For the most part, however, they also appear to be trading in a range, which could suggest that a big altcoin move is on the horizon.

Which Scenario Will Playout in Crypto Markets?

If Bitcoin dominance breaks down from the multi-month ascending wedge it has formed – usually a bearish structure – then BTC dominance could end, and an alt season could result.

Altcoins and Bitcoin often move interrelated, but for most of 2019, they couldn’t have been more different in their price trajectory. Should Bitcoin’s price drop drastically from here, and altcoins retain their value, an end to BTC dominance could be seen.

Nonetheless, if BTC trades sideways, while altcoins go on a 1000 percent or more run, then the alt season every crypto enthusiast has been waiting for will finally be here. For instance, cryptos such as Cardano, Theta, and Ethereum have been building for years, and currently, have real traction as they have proven themselves after surviving the bear market. Crypto experts forecast that these are the projects to most likely spark an altcoin dominance in the coming months.

Wayne Jones
Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, I cover trendy issues on digital currencies.

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