Despite the gains that have been seen in the market, the altcoin season is still far from starting, signaled by how high the Bitcoin dominance still is. Bitcoin’s dominance over the crypto market, depending on how high or low it is, remains the major determinant of when the altcoin season will begin. Since the dominance is still above 60%, there is the possibility that it can still reclaim a significant level and send the altcoin market crashing once again.
Bitcoin Dominance Risks Complete Breakdown
Crypto analyst Colin Talks Crypto took to X to explain where the Bitcoin dominance is sitting and what might happen next. The analyst points out that currently, the dominance seems to be staging a repeat of December 2024, breaking down out of the blue channel that saw altcoins rally.
With the drop below the 61% level, the dominance has once again dropped below this channel and is now trending outside of it. However, just like in December 2024, Colin explains that this could be another fakeout. If that is the case, then the dominance could reverse quickly and keep rising again. In the case of a fakeout, the market could tank again, with altcoins bearing the brunt of the decline.
Alternatively, this move could be substantiated by a retest and subsequent breakdown of the channel. As Colin explains, the Bitcoin dominance could rise to retest the underside of the blue channel at around 62%. But if it breaks down again after doing so, then it would be confirmation that the altcoin season has begun.
In the same vein, Ethereum looks to have bottomed against Bitcoin as the ETH/BTC chart showed a reversal this month. This is also another sign that Bitcoin dominance could be ending and the start of the next altcoin season is around the corner.
Why Altcoin Season Is Still At Risk
Bitcoin dominance still sitting so close to the lower side of the channel means that the risk of reversal is still high. In fact, there is the possibility that the dominance will reclaim the channel, something that would be disastrous for the altcoin market. Colin explains that if this happens and the Bitcoin dominance does move back into the channel again, then it would mean that the altcoin season has not begun.
A reversal into the channel is not the only scenario that could be negative for altcoins, as there is also the possibility of a sideways chop. The analyst explains that this scenario would not be great for altcoins as a sideways chop could last for months and altcoins could bleed in response.
The most bullish scenario for an altcoin season still remains that there is a sustained breakdown of the channel. During this time, “The BTC price can continue higher even if BTC dominance is dropping. Both Alts and BTC can increase in USD value during this time,” Colin stated.
Featured image from Dall.E, chart from TradingView.com
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