Bullish Divergence Sparks Altcoin Rally as Market Prepares to Surge

• Altcoin dominance is building strength with bullish divergence, signaling strong potential for gains.  
• The RSI chart shows recovery patterns that often lead to sharp market moves in favor of smaller cryptocurrencies.  
• Market trends suggest rising opportunities for altcoins as investors shift focus from top coins like Bitcoin and Ethereum.  

The cryptocurrency market’s “Others” dominance chart, which excludes the top 10 coins, showcases an intriguing technical setup that hints at upward potential. As of January 10, 2025, the dominance level sits at 10.39%, reflecting a slight decline of  -0.69%  for the week. However, historical patterns and recent data suggest the market may be gearing up for a bullish breakout.

The chart, shared by CryptoBullet, highlights one of the most notable features on the weekly chart: two bullish divergences on the RSI (Relative Strength Index). The first occurred around early 2023 when price trends showed lower lows while the RSI printed higher lows. 

This divergence marked the beginning of a recovery phase that eventually led to a peak in mid-2023. Fast forward to late 2024, and a similar pattern has emerged. The RSI once again signals strength as price action struggles near support, hinting at potential momentum building in favor of a rally.

Historical Echoes and Recurring Patterns

The chart draws attention to the consistency of bullish divergence leading to high market gains. The early 2023 divergence saw the dominance rebound from 9.60% to 11.13%, a notable increase of 1.53 percentage points, indicating that this setup should not be ignored. The current divergence appears to mimic this trajectory, with dominance levels rebounding from a recent low of 10.24% to 10.39%, suggesting an early-stage recovery.

The green upward arrow plotted on the chart, symbolizing market optimism, adds further weight to this potential rally. Historical trends, coupled with technical indicators, often align with a breakout toward dominance levels exceeding 12%, especially as market confidence builds outside the top 10 cryptocurrencies.

Market Context: Why “Others” Matter

The “Others” category reflects the performance of altcoins beyond the major players like Bitcoin and Ethereum. A rising dominance in this segment often indicates a shift in investor focus toward smaller-cap coins, which tend to outperform in bullish cycles. As BTC dominance stagnates, this altcoin-focused segment could thrive, bringing opportunities for short-term traders and long-term holders.

The chart’s RSI level near 40 is another critical metric. While not yet in the oversold zone, it demonstrates enough room for upward movement, suggesting a window for accumulation. Traders and analysts closely monitor this category for signs of a breakout, particularly as historical precedents have shown swift upward moves once the divergence materializes.

What Lies Ahead?

With dominance at 10.39%, the technical setup strongly points toward a rally in altcoins as the broader market stabilizes. If the RSI divergence plays out as expected, we could see dominance levels climbing back to the 11% to 12% range, potentially paving the way for an altcoin season.

The key takeaway? Stay focused. Historical data doesn’t lie, and the combination of bullish divergence and improving RSI metrics often signals one thing: a major move is coming. As the tweet from CryptoBullet asks, “Are you ready for what’s coming?”

The next few weeks could define whether the altcoin sector outpaces the market or faces resistance near the 10.50% range. For now, eyes are on the charts, and the countdown to a potential breakout has begun. Time to buckle up!