Bitcoin Faces Threat as Altcoins Surge, Analyst Warns of Potential Top at $45K

In the dynamic world of cryptocurrency, Bitcoin’s dominance is facing a critical juncture, with analysts warning of a potential top despite the cryptocurrency eyeing $45,000. On December 9, renowned analyst and social media commentator Matthew Hyland expressed caution about Bitcoin’s price action, highlighting a concerning trend in its market dominance.

Bitcoin bulls managed to maintain momentum as the week concluded, propelling BTC/USD to new 19-month highs of $44,729 on Bitstamp on December 8. However, Hyland’s analysis suggests that all may not be well for Bitcoin’s price strength. According to him, the smoking gun lies in Bitcoin’s share of the overall crypto market.

In a post on X (formerly Twitter), Hyland pointed out a bearish divergence in Bitcoin’s dominance, stating, “Dominance is rolling over as per the bear divergence that was noted. If it breaks and closes below 51.81, it would be the first lower low in over a year and an end to the uptrend, along with a likely top put in.”

Bitcoin dominance recently spiked to 55.26% on December 6, its highest level since April 2021, but a swift turnaround saw it unwind to 53.4% at the time of writing. The potential violation of the key level could signal a shift in the market sentiment, risking the cancellation of Bitcoin’s latest uptrend.

Hyland’s analysis aligns with the belief held by some in the cryptocurrency community that a reversal in Bitcoin dominance could pave the way for an “altseason,” where alternative cryptocurrencies experience a significant rally. On the same day, top altcoins such as Cardano (ADA) and Avalanche (AVAX) led the charge, gaining 22% in 24 hours. Ether (ETH), the largest altcoin, remained steady, while ADA and AVAX posted impressive week-over-week gains exceeding 50%.

Trader Jacob Canfield shared insights on the potential altseason, stating, “A 2% drop in bitcoin dominance and alts went nuts today. Like I said, it’s just a taste. When dominance really starts dropping is when we see the face-melting alt season we all know and love.”

As Bitcoin hovers around the $45,000 mark, market participants are closely watching for any signs of a sustained dip in dominance, which could trigger a broader altcoin rally. The total altcoin market cap was up 2.4% on the day, with December’s month-to-date gains reaching 18.4%.

In this ever-evolving crypto landscape, the interplay between Bitcoin and altcoins remains a crucial factor influencing market dynamics. Traders and enthusiasts are advised to stay vigilant and closely monitor Bitcoin’s dominance levels for potential shifts in the overall market sentiment.

By Habib Rahman

My professional background is in public relations and I am the founder of Cryptochating. My journey into blockchain technology started four years ago, and I haven't looked back since then. The future of decentralized technology is incredibly fascinating to me, and I am passionate about communicating how it will change the world.

Leave a Reply

Your email address will not be published. Required fields are marked *