- Bitcoin dominance broke below 61%, forming a clear wedge breakdown that may signal a capital shift to altcoins.
- Analysts highlight that altcoins are heavily oversold, while historical data shows similar setups preceded strong rallies.
- Technical charts show a MACD crossover and a 50MA breach, both increasing the odds of a broad altcoin recovery.
Bitcoin dominance, a key measure of Bitcoin’s market share relative to all cryptocurrencies, has broken down from a long-term ascending wedge pattern. According to analyst Anup Dhungana, this structural move could mark the beginning of a major “altcoin season.”
Dhungana noted that altcoins are “technically very oversold,” and the breakdown in BTC dominance increases the probability of a broad market rotation into alternative assets. The chart, shared on X, shows Bitcoin dominance near 60.91%, slipping below the weekly 50 moving average (50MA).
The pattern, which has developed since 2020, illustrates Bitcoin’s repeated attempts to maintain dominance within a narrowing wedge. A reversal toward lower support levels has followed each test of the resistance line.
As Bitcoin dominance weakens, capital often flows into altcoins—historically triggering periods of rapid outperformance by assets outside Bitcoin. The visual data also highlights a MACD crossover resembling the 2021 setup, which preceded a similar decline in BTC dominance and a corresponding surge in altcoins.
Altcoins Poised for Momentum as Oversold Levels Deepen
Dhungana’s analysis describes the market as technically primed for a shift. The monthly chart shows altcoins entering heavily oversold territory, suggesting that sellers may be losing strength. The timing aligns with the technical breakdown in BTC dominance, which could serve as the trigger for renewed interest in alternative assets.
Historically, such breakdowns have coincided with strong recoveries in altcoin valuations, often resulting in market-wide bullish cycles. Data from 2017 and 2021 displayed similar structures where declining dominance led to double-digit percentage gains across mid- and small-cap crypto assets.
The analyst’s annotated chart projects a potential decline toward 45% BTC dominance, an area that aligns with previous cycle lows. This projection suggests that a deeper retracement could unlock broader market liquidity for altcoins in the coming quarters.
If dominance continues its downward trajectory, traders may interpret the movement as a signal to rebalance portfolios away from Bitcoin-heavy allocations. The transition could mark the beginning of a cycle similar to past altcoin expansions.
Could the current technical setup indicate that the long-anticipated altcoin season is finally approaching?
Technical Indicators Align With Historical Altcoin Breakouts
The MACD indicator, displayed below the dominance chart, shows a bearish crossover for the first time since late 2020. The previous crossover coincided with Bitcoin’s consolidation phase and a simultaneous surge in altcoin valuations. This indicator alignment strengthens the argument for a possible market shift in the near term.
A visible increase in altcoin trading volumes has accompanied each major Bitcoin dominance correction over the past eight years. Similar momentum patterns can already be observed in several mid-cap ecosystems, particularly within DeFi and gaming sectors.
The chart further reveals that Bitcoin’s dominance has failed to sustain its higher highs, indicating a loss of market momentum. A consistent breakdown beneath the 50MA line has historically preceded dominance drops of 10–15 percentage points.
Dhungana’s assessment aligns with prior technical observations from 2018 and 2021, both of which marked the onset of altcoin-led recoveries. The analyst maintains that while Bitcoin remains the benchmark, the shifting dominance chart hints at a significant capital rotation in progress.
With dominance slipping below 61%, the probability of a near-term altcoin breakout continues to grow. If current momentum persists, the market could experience a renewed period of diversification as investors seek higher-risk, higher-reward positions outside Bitcoin.
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