Altcoins In The Spotlight As Bitcoin Dominance Flashes Sell Signal
As the world’s largest cryptocurrency, Bitcoin is losing its market dominance, thereby changing the cryptocurrency scenario. Analysts believe that cryptocurrencies may soon be in the spotlight as the cryptocurrency’s market share dropped to 55.80% and a confirmed sell signal emerged for the first time since 2020. Bitcoin price Struggling to maintain its momentum and breaking below important trendline support, the sentiment gained traction.
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Bearish Signal Sparks Copycat Season Conjecture
The relative strength index (RSI), which indicates Bitcoin dominance, is currently below its midline, thus reinforcing negative expectations. Historically, this situation cleared the way for the so-called “copycat season,” i.e. other seasons cryptocurrency Shine on Bitcoin. Experts believe that capital from Bitcoin may flow into altcoins, creating instability and new investment prospects.
Bitcoin dominance sees sell signal for first time since 2020
make real fun #alternativeseason start pic.twitter.com/R9QeCO69YH
— Mikybull 🐂Crypto (@MikybullCrypto) December 3, 2024
This trend corresponds with the reduction in holdings of long-term Bitcoin investors, so it is not just theoretical. The latest data from IntoTheBlock shows that wallets containing Bitcoin for more than 155 days currently hold only about 12.45 million Bitcoin, which is the lowest number since mid-2022. These balances dropped by nearly 10%, indicating that some people were cashing out their gains or moving funds to cold wallets.
Bitcoin: Long-term holdings decline
Bitcoin’s price has encountered strong resistance as Alphacoin’s expected target of $100,000 gets closer. Multiple failures at $97,500 caused the stock price to drop significantly. Bitcoin fell even further on Tuesday, selling for around $93,940. This volatility is accompanied by significant declines in long-term assets, which makes it difficult to judge where the market is headed.
Long-term Bitcoin holders are gradually reducing their balances and currently hold 12.45 million Bitcoins, which is the lowest level since July 2022.
So far, the decline has been less severe than in past cycles. Long-term holder balances fell 9.8% this cycle, compared with 15% in 2021 and 26% in 2021… pic.twitter.com/eA5Cckrgs4
— IntoTheBlock (@intotheblock) December 3, 2024
Although the current decline in open interest is not as steep as in 2021 or 2017, it still draws attention to changes in market attitudes. Some observers say this behavior suggests a purposeful repositioning by sophisticated investors trying to adapt to changing market conditions.
Rare bullish signal brings hope to bearish sentiment
Despite the negative sentiment, rare bullish signs offer some hope. In line with the moving averages recently, the Spend Output Profit Margin (SOPR) suggests that Bitcoin may rebound over the next one to two months. This sign is rare and only occurs once or twice during an up market cycle.
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While bearish pressure remains evident, experts note that these positive signals present some good possibilities for investors with risk tolerance. Consistent with past patterns following halving events, market watchers are also bracing for a possible plunge as January 2025 approaches.
Currently, Bitcoin’s declining dominance and increasing volatility highlight the need for a cautious and strategic approach. Whether it’s the Altseason or a new Bitcoin surge, the coming months could change the cryptocurrency landscape.
Featured images from DALL-E, charts from TradingView
