Bitcoin dominance (BTC.D) just hit a major roadblock. It bounced off a key resistance level that, historically, has kicked off huge rallies in altcoins. Analysts are buzzing, wondering if we’re about to see a repeat of 2021’s altcoin explosion.
A Technical Chart Tells a Story
One analyst, Tony Severino, pointed out on X that BTC.D recently hit a resistance level around 65%. This isn’t just any level; it’s a crucial technical point. In early 2021, when BTC.D hit this same level, it got rejected, plummeting and triggering a massive altcoin rally.
Severino’s chart shows a similar pattern playing out now. BTC.D climbed, hit the 65% resistance, and got rejected. It’s currently just below that level. If history repeats, we could see a significant shift of money from Bitcoin to altcoins. His chart also highlights other important technical levels to watch, indicating potential further drops in Bitcoin dominance and a boost for altcoins.
The Dollar and Altcoins: A Surprising Connection?
Another analyst, Merlijn The Trader, adds another layer to this prediction. He noticed a pattern between the US Dollar Index (DXY) and Bitcoin dominance. Three times since 2016, the DXY showed a “bull trap” (a false signal of upward movement), followed by a sharp drop in BTC.D and a massive altcoin rally.
This pattern suggests that a weakening dollar could lead to a decline in Bitcoin dominance and a surge in altcoins. The current market situation looks eerily similar to the setup before those previous altcoin booms. If this pattern holds, we could be in for a significant altcoin run in the coming months.
