- Bitcoin Dominance broke below a two-year ascending broadening wedge, confirming a bearish trend and creating potential for altcoin capital inflows.
- The current bearish backtest at 60% dominance serves as a key resistance, signaling BTC.D could fall toward 50% or lower.
- Past BTC dominance declines have historically led to altcoin seasons, with liquidity shifting toward mid-cap and low-cap tokens, boosting broad market rallies.
Bitcoin Dominance (BTC.D) has fallen into a bearish backtest that increases the possibility of capital rotation into altcoins, having broken down after a multi-year structure.
Breakdown from a Multi-Year Wedge
Crypto analyst ๐๐ ๐ฆ๐ค๐ฅ๐๐โ๐ shared a chart showing BTC.D on the weekly timeframe. The data reveals an ascending broadening wedge that persisted for over two years. This pattern eventually broke to the downside, signaling structural weakness in Bitcoinโs market share.
With this move, BTC.D is in the process of testing the previous support area, which has become resistance at the 60 per cent mark. This retest is considered by the market players as a key ingredient in assuring them about the force of the recent breakdown. If dominance fails to reclaim the wedge boundary, the setup could lead to further declines.
Analysts project that BTC.D may fall toward 50% or even 48% if resistance continues to hold. Such a move would indicate declining market strength for Bitcoin relative to altcoins. This shift has historically opened pathways for strong rotations across the broader cryptocurrency market.
Altcoin Market Stands to Benefit
The same analyst emphasized that a breakdown in Bitcoin Dominance often favors altcoin performance. Historical market cycles show that declining dominance coincides with phases where mid-cap and low-cap tokens outperform. These conditions often spark liquidity inflows that create broad rallies across altcoins.
Currently, Bitcoinโs consolidation near resistance coincides with BTC.D rolling over from a critical level. This setup signals the possibility of extended capital migration into altcoins in the coming weeks. As liquidity redistributes, altcoins could capture greater attention and trading volume from market participants.
Market watchers also note that past dominance declines have marked the beginning of sustained altcoin seasons. These periods often bring aggressive rotations, driving multi-month rallies in non-Bitcoin assets. The latest wedge breakdown and bearish backtest suggest the stage is set for a similar outcome.
