- Bitcoin dominance faces resistance with overbought Stochastic RSI, signaling a potential pullback that may trigger an altcoin rally.
- Historical rejections at this level and RSI peaks suggest a possible downturn in BTC dominance, favoring capital flow to altcoins.
- A failure to break resistance could lead to altcoin gains, as repeated patterns hint at another bearish move in Bitcoin dominance.
According to analyst Moustache, Bitcoin’s dominance is facing another crucial test at a historically significant resistance zone. This level has triggered multiple rejections in the past 1.5 years. Moreover, the Stochastic RSI is in the overbought zone, indicating potential downward momentum. If history repeats, altcoins could see a rally.
Bitcoin Dominance at Critical Resistance
Bitcoin dominance is approaching a strong resistance trendline that has led to several rejections in the past. This level has been struck by price movement several times before retreating. A high stochastic RSI reading, which indicates overbought conditions, has preceded each rejection. The situation now is no different. A bearish crossover may be imminent when the stochastic RSI approaches severe levels.
Moreover, the significance of this signal has been reinforced by previous rejections that coincided with stochastic RSI peaks. The overall bullish structure is maintained by the trendline. Dominance hasn’t been able to rise over this threshold, though, suggesting that it may fall further.
Altcoins Poised for Gains
A Bitcoin dominance rejection often benefits altcoins. When BTC dominance drops, capital typically flows into alternative cryptocurrencies. Since the resistance level remains unbroken, altcoins could see a boost if Bitcoin’s dominance pulls back again. This trend has been consistent over the past 18 months.
Additionally, volume data is missing, making liquidity assessment incomplete. However, repeated rejections suggest that market participants recognize this resistance level. Consequently, traders should watch for confirmation of a reversal before making moves. If Bitcoin dominance breaks out with strong momentum, the trend structure could shift. A breakout above this resistance may lead to further BTC dominance gains.
On the other hand, failure to break this zone could indicate a downward movement. The Stochastic RSI is peaking, and a bearish crossover could confirm a reversal. This pattern has played out multiple times in the past. If dominance declines, altcoins could enter a bullish phase.
