Bitcoin’s dominance in the crypto market has been steadily rising, reaching 60.3% after a 4% increase in the past 24 hours. Crypto analyst Rekt Capital has identified the 71% dominance level as a critical threshold for the onset of an altcoin season. Historical patterns suggest that when Bitcoin’s dominance reaches this level and faces rejection, it triggers a period of outperformance for altcoins.
The current market cycle has been characterized by strong institutional demand for Bitcoin, fueled by the introduction of Spot Bitcoin ETFs and the growing perception of BTC as a potential reserve asset for countries. This prolonged Bitcoin dominance has led to a sluggish performance in the altcoin market, with brief periods of outperformance quickly followed by capital rotating back into Bitcoin.
However, if the 71% dominance level is reached and subsequently rejected, it could signal a significant shift in market dynamics. In the past, such rejections have been followed by multi-month downtrends in Bitcoin’s dominance, allowing altcoins to experience rapid gains. The most recent example of this pattern occurred during the 2021 bull market when Bitcoin’s dominance spiked above 72% before reversing course and ultimately stabilizing around 40%.
Investors eagerly awaiting an altcoin season may need to exercise patience, as Bitcoin’s dominance is currently at 60.3% and steadily climbing towards the 71% mark. If history repeats itself, a rejection at this level could trigger a new altcoin season. However, unlike previous cycles, Ethereum may not be the leading beneficiary this time around, as other altcoins like XRP, Solana, and Dogecoin have been gaining more traction among traders.
As the crypto market continues to evolve, the interplay between Bitcoin’s dominance and the performance of altcoins remains a crucial factor to watch. The potential for an altcoin season hinges on the 71% dominance level, making it a key level for traders and investors to monitor closely.
Tags: Bitcoin dominance, altcoin season, crypto market cycles, market dynamics, technical analysis
Source: https://www.newsbtc.com/news/bitcoin/bitcoin-dominance-reaching-71/