Key Takeaways
The Bitcoin Dominance Rate peaked in November 2024, the culmination of an upward movement that had lasted over two years. The market’s momentum has shifted toward altcoins, with BTCD falling 4% and the Altcoin Market Cap approaching its all-time high.
While BTCD attempted to rally in December, the momentum faded soon after, leading to a lower high and another decline.
In this article, we will analyze the BTCD and Altcoin Market Cap charts to determine whether the altcoin season has started and how long it will continue.
The Bitcoin Dominance Rate started a five-wave increase (white) in September 2022, culminating with a high of $61.53% in November 2024. However, this upward movement has likely ended for several reasons.
Firstly, the wave and sub-wave counts show a completed structure where wave five created an ending diagonal, noticeable by the ascending wedge.
Secondly, the high was made right at the 0.618 Fibonacci retracement resistance level, triggering a breakdown from the ascending wedge.
Finally, technical indicators are bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) created bearish divergences throughout the creation of the ascending wedge. Now, the RSI has fallen below 50 and the MACD is close to dropping below 0.
This is critical since neither of the indicators has been below these levels since shortly after the start of the upward movement in January 2023.
As a result, the BTCD will likely fall toward the next closest support at 51.20%. If the decline is similar to the previous one, BTCD will continue falling for at least another month.
The Altcoin market cap chart is similarly bullish, showing a breakout from a descending parallel channel and reclaiming the $1.40 trillion horizontal area.
Additionally, the wave count suggests ALTCAP has another upward movement left in it with a target of $2.15-$2.19 trillion, created by the 2.61 external Fibonacci retracement and by giving wave five the same length as waves one and three combined (white).
However, ALTCAP is likely in the final portion of its upward movement. This is clear by both the wave count, which suggests that this is the final sub-wave in the final wave of the increase, and the bearish divergence in the RSI and MACD (green).
Divergences are rare in the weekly time frame, often leading to significant bearish trend reversals.
While the Altcoin market cap can extend further, as is possible in wave five, the next drop with a large magnitude will likely mark the end of the bull market.
The Bitcoin Dominance and Altcoin Market Cap charts align, suggesting that an altcoin season has started and will continue throughout the first quarter of 2025.
BTCD can continue falling toward 51% while a new all-time high is expected for the Altcoin Market Cap.