Evening Star Pattern Hints at Bitcoin Dominance Weakness, Altcoins Gain Strength

• Bitcoin dominance faces a potential reversal as the evening star pattern signals weakening bullish momentum.
• RSI and stochastic indicators confirm declining strength, suggesting a pullback in Bitcoin dominance and a shift toward altcoins.
• Support levels near 60% and 58% are critical, with a further drop potentially signaling increased altcoin market activity.

Bitcoin dominance has been on an uptrend, recently surpassing 61%. However, technical indicators now signal a potential reversal. A sharp breakout occurred, but an evening star pattern has emerged, indicating weakening bullish momentum. This formation suggests altcoins may gain traction as Bitcoin dominance declines. Besides, the market structure remains strong, yet a correction appears imminent.

Evening Star Pattern Signals Potential Shift

The evening star pattern has formed at the recent peak, comprising three key candles. First, a strong bullish candle showed upward momentum. Then, a small-bodied candle indicated hesitation among buyers. Finally, a bearish candle confirmed potential selling pressure. Hence, this pattern suggests Bitcoin dominance may decline, giving altcoins room to recover.

Moreover, a zoomed-in illustration of the evening star emphasizes its significance. Historically, this pattern often leads to short-term market shifts. If dominance follows this trend, a downward move could be expected soon.

Technical Indicators Show Weakening Momentum

The Relative Strength Index (RSI) has been trending near overbought levels. It previously climbed above 70 but now shows a slight decline. This drop indicates weakening momentum, aligning with the evening star pattern. Additionally, the RSI moving average still supports the uptrend but could flatten if dominance continues declining.

Furthermore, the stochastic RSI signals further weakness. A crossover has occurred in the overbought region, with the red and green lines crossing downward. Consequently, this suggests a reduction in bullish momentum, reinforcing the likelihood of a pullback in Bitcoin dominance.

Key Support and Resistance Levels

Currently, Bitcoin’s dominance remains above 61%. However, if it declines, support levels could form near previous consolidation zones around 60% and 58%. A move below these levels could confirm a shift in market sentiment. Conversely, resistance remains at recent highs. If Bitcoin dominance breaks above, the evening star pattern could be invalidated.

A decline in Bitcoin dominance often benefits altcoins. Many traders monitor key technical indicators to assess potential shifts. If Bitcoin dominance weakens, capital may flow into altcoins, leading to higher valuations. However, stability or an upward reversal in dominance could maintain Bitcoin’s market strength.