Analyst: Bitcoin Dominance Slumps, Altcoins Prepare to Surge
5/30/20242 min read
According to renowned crypto analyst Dan Gambardello, the crypto market is on the verge of a crucial phase. Based on six and a half years of technical analysis and volume data, Gambardello expects significant market volatility in the next two months.
Altcoin Season Predictions
Gambardello's analysis predicts the start of the altcoin season or altseason which will be accompanied by a significant decline in BTC dominance.
He presented a graphical analysis of the major coins' dominance trends from 2017 to present, highlighting the inverse relationship between BTC dominance and the altcoin market, especially during periods of high volatility. The analyst presentation detailed how BTC dominance declined during the altcoin boom of the 2017 and 2021 bull runs. The chart reveals a recurring pattern where Bitcoin dominance shows a cyclical trend, rallying before the next decline.
Additionally, Gambardello displays two moving average (MA) indicators whose crossover points have historically signaled a decline in that dominance.
Indicator Heads Down
Coin Edition reports that, Gambardello's chart shows that this MA is approaching the crossover point once again. The data also shows that Bitcoin dominance is nearing its peak, with signs of losing momentum. As a result, the analyst expects a potential decline in BTC dominance, signaling a shift in investment from Bitcoin to altcoins or a substantial capital flow into the altcoin market. Historical market behavior supports Gambardello's predictions. Typically, Bitcoin reaches new highs, marking the start of a bull cycle. After that, a period of accumulation occurred, which was followed by renewed capital inflows leading to a parabolic rally in various altcoins. The emotional dynamics of the crypto market also played an important role in this development. Retail investors often hesitate during initial rallies due to fear, uncertainty and doubt (FUD).
This cautious approach was soon replaced by FOMO, prompting investors to rush into the market, resulting in an incredible rally and high volatility.
The Importance of Monitoring Bitcoin Dominance
Gambardello's predictions are in line with a broader understanding of crypto market cycles. Bitcoin dominance tends to increase during market corrections and consolidations, where investors seek the relative safety of the largest cryptocurrency.
Conversely, during bull runs, altcoins often outperform Bitcoin, leading to a decline in dominance as investors seek higher returns. Bitcoin's upcoming decline in dominance could signal a profitable period for altcoin investors. If historical patterns hold, altcoins may see significant upside as Bitcoin's dominance weakens.
Investors should prepare for a volatile but potentially profitable market phase, characterized by sharp moves in both Bitcoin and altcoins.
support@coreasia.io
© 2024. CORE (Community Representative)