Bitcoin dominance surged past 65.7% this week—its highest level since January 2021—fueling speculation that an altcoin season may be just around the corner.
As BTC climbed to $97,650 on Wednesday, it continued to outpace the rest of the crypto market. While Bitcoin is now within striking distance of its all-time high, many altcoins remain well below their 2024 peaks.
This divergence has widened BTC’s market share significantly. In contrast, major altcoins like Ethereum, Cardano, Solana, XRP, and TRON are down between 37% and 51% from recent highs.
But technical signals now suggest the tide may be about to turn.
Bitcoin Dominance: Technicals Show Reversal Risk
The Bitcoin dominance chart—which measures BTC’s share of total crypto market cap—shows strong bullish momentum. It has stayed above both the 50- and 100-week moving averages, and the Average Directional Index (ADX)is at 43, signaling strength.
However, momentum indicators also show a potential reversal. The Relative Strength Index (RSI) has climbed to 74.10, firmly into overbought territory. Additionally, the dominance has formed a rising wedge, a classic bearish pattern that often precedes sharp pullbacks.
If dominance hits the 72.92% level—its highest point from December 2022—it could trigger a wave of profit-taking and capital rotation into altcoins.
Ethereum Lags, but Altcoin Structure Looks Bullish
Ethereum’s market dominance has plummeted to 7.5%, down from over 22% in 2022. ETH/BTC remains under pressure, and its inability to reclaim key resistance levels has traders questioning near-term strength.
Still, the total altcoin market cap (excluding Bitcoin) paints a more optimistic picture.
On the weekly chart, altcoins have formed a bullish megaphone pattern—a structure defined by widening upward-sloping trendlines. After a recent pullback to the lower boundary, a rebound toward the upper line looks increasingly likely.
Furthermore, altcoins appear to be completing the final CD leg of a harmonic XABCD pattern, which suggests that momentum could return soon—especially if dominance retreats.
What’s Driving the Rotation Potential?
Several catalysts are creating a backdrop ripe for altcoin growth:
- Bitcoin ETF inflows have exceeded $40 billion, helping BTC rally 30% year-to-date.
- Ethereum upgrades (like EIP-7251) and Layer 2 growth hint at renewed developer and investor interest.
- Oversold conditions in major altcoins are attracting accumulation from long-term holders.
- On-chain data from platforms like DeFiLlama shows stablecoin activity rising on altcoin networks, particularly Solana, Base, and Arbitrum.
Final Thoughts: Is Altcoin Season Here?
While Bitcoin continues to steal the spotlight, technicals suggest its dominance may be topping out. A rotation into altcoins could emerge soon—especially if Bitcoin consolidates or dips after the Federal Reserve’s latest rate decision.
Traders and investors should watch the 72.92% dominance level and altcoin market cap’s reaction to the megaphone pattern closely. If these confirm a reversal, a new altcoin season could spark sizable rallies across Ethereum, Solana, Cardano, and emerging Layer 2 and DeFi projects.
