- Bitcoin dominance nears long-term resistance as Fed liquidity bottom suggests capital rotation into altcoins for Q2 2025.
- BTC golden cross and trendline breakout signal bullish momentum while resistance from the Kumo Cloud indicates possible price consolidation.
- Historical patterns show BTC dominance peaks align with Fed balance sheet lows, hinting at an impending altcoin rally as liquidity rises.
Bitcoin Dominance (BTC.d) is hovering near a key resistance zone while macro liquidity indicators signal an imminent shift. At 63.87%, BTC dominance approaches the upper boundary of a long-term trendline, showing signs of potential reversal. Meanwhile, the Federal Reserve’s total assets data has bottomed according to CryptoElites, mirroring historical setups that previously triggered altcoin rallies. This inverse correlation could define Q2 2025’s market direction. Hence, investors are closely watching this confluence for its next move.
The Federal Reserve’s balance sheet, visualized through a magenta line, has historically shaped broader crypto cycles. Notably, Bitcoin dominance topped each time Fed liquidity bottomed. Each “BTC.d TOP” aligned precisely with a low in the Fed’s asset curve. This structural alignment previously marked altcoin resurgence phases, as liquidity expanded from central banks. Consequently, historical behavior positions the current environment for another capital rotation.
Golden Cross Forms as BTC Breaks Trendline
In parallel, according to Titan Of Crypto, Bitcoin’s daily chart shows encouraging structural changes. The BTCUSDC perpetual contract recently broke a descending trendline. This breakout aligns with the emergence of a Golden Cross, where the Tenkan-sen (red) crossed above the Kijun-sen (blue). Though not a direct buy signal, this crossover reveals a shift in short-term momentum. Significantly, price action has now ranged between $82,000 and $85,000, with candles reflecting low volatility.
Besides, Confirming momentum strength, the Chikou Span (yellow line) has risen above previous price action. Furthermore, the price remains above the Kijun-sen and Tenkan-sen, supporting short-term bullish control. However, the Kumo Cloud still hangs above, ranging between $85,000 and $90,000. This cloud presents strong resistance but remains flat, signaling equilibrium between supply and demand.
Altcoin Season Incoming?
Moreover, BTC dominance failed to break above the resistance trendline decisively. Historically, this level rejected further upside, followed by dominance falling below 40%. The same scenario could unfold as the Fed expands its balance sheet again. Hence, dominance may reverse sharply, pushing liquidity toward altcoins. If confirmed, this setup mirrors previous altcoin seasons.
