Recent analysis suggests that the cryptocurrency market could be nearing a transition. Experts highlight a steep decline in Bitcoin dominance, which may indicate a rising interest in altcoins.
Bitcoin Dominance Decline
Analyst Trader Tardigrade presented a technical chart showing a sharp decline in Bitcoin dominance. According to him, a multi-year rising wedge pattern in $BTC.D was recently broken downward. In the past, such breakdowns have led to rapid growth in the altcoin market, often referred to as 'altseason'. Historical periods in 2016/17 and 2019/21, when BTC dominance plunged, also saw sharp rises in altcoin market cap ($Total2), suggesting a cyclical capital rotation from Bitcoin to altcoins.
Altcoin Market Reaction
During previous 'altseasons,' the altcoin market cap consistently grew as Bitcoin's market share dropped. $Total2, measuring total capitalization excluding Bitcoin, recorded accelerated growth during past dominance breakdowns. This inverse relationship between $BTC.D and $Total2 recurs in crypto market cycles. Tardigrade notes that altcoins could outperform Bitcoin in market performance in the future. DefiWimar's data suggests that altcoin capitalization could surge to $20 trillion, marking the largest altseason on record.
Future Forecasts
Trader Tardigrade's projection labels the upcoming phase as 'Altseason 2025–2027,' where altcoins could outperform Bitcoin. With Bitcoin dominance signaling a reversal of its multi-year uptrend, attention is shifting toward the altcoin sector. Analysts suggest select altcoins could achieve returns of up to 1000x, drawing parallels with earlier cycles in 2017 and 2021.
The decline in Bitcoin dominance may herald the start of a new 'altseason', making the altcoin market one to watch in the coming years.
