- Bitcoin dominance rejected at resistance with bearish engulfing candles, repeating a pattern seen in the 2021 cycle.
- Monthly MACD shows a bearish cross, signaling momentum shift away from Bitcoin toward altcoins.
- Ethereum gained over 600% during the last dominance decline, sparking one of the strongest altseasons in history.
Bitcoin dominance has weakened after another rejection at a long-term resistance level, signaling a potential shift in market structure. A bearish cross on the monthly MACD suggests capital rotation toward altcoins could be underway, similar to the 2021 cycle.
Bitcoin Dominance Faces Rejection
Bitcoin dominance has continued to move lower after facing a strong rejection at the descending resistance line. The chart presented by Merlijn The Trader (@MerlijnTrader) pointed to two bearish engulfing candles, one in 2021 and another in 2024/25. Each rejection occurred at a crucial resistance zone, signaling sellers remain firmly in control.
These bearish engulfing candles on the monthly chart confirm a structural weakness in Bitcoin dominance. They represent moments when selling pressure outweighed buyers’ attempts to push dominance higher. With this formation repeating, the technical setup suggests history could follow a familiar pattern.
The repeated rejection aligns with the broader narrative of capital shifting toward altcoins. As Bitcoin dominance loses ground, liquidity often finds its way into alternative assets, sparking periods of rapid growth in the wider crypto market.
MACD Confirms Bearish Momentum
The monthly MACD indicator further strengthens the bearish outlook for Bitcoin dominance. In the year 2021, a bearish cross had happened where the histogram went red and the levels of dominance dropped drastically. The current chart mirrors that exact signal, suggesting another move lower could follow.
When the MACD lines cross downward, momentum shifts decisively away from Bitcoin. Traders recognize this as a sign of weakening market share for the leading cryptocurrency. As this occurs, altcoins generally benefit as investors look for higher returns.
Merlijn noted that the last time such a setup appeared, Ethereum surged more than 600% as dominance declined. The same conditions are now present, raising the possibility of another major rotation into altcoins if momentum continues.
Market Rotation and Altseason Potential
Bitcoin is as of writing, priced at $113,836 beating a 1.36 percent loss in the preceding 24 hours and 4.71 percent deficiency in the past week. Ethereum is, as of writing, priced at $4,231.03, which is -0.93 percent every day and 8.55 percent every week. These movements coincide with weakening dominance and renewed discussion around altseason.
The rejection in dominance is not just technical but also signals a broader market shift. Traders are now showing a willingness to allocate capital to altcoins as Bitcoin’s share of the market shrinks. This liquidity rotation can result in rapid price increases across mid- and small-cap assets.Merlijn’s commentary emphasized that altseason may not be gradual but sudden. His statement, “Altseason just declared war”, captures the aggressive nature of past cycles when altcoins rallied far stronger than expected. The chart suggests conditions are aligning once more for that scenario.
