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Bitcoin ($BTC) dominance is being rejected at the 57.5% level. The candles have been below for the past five weeks. As Bitcoin begins to bottom against the US dollar, could altcoins start to move?
Has Bitcoin Dominance Reached Its Peak?
Since Bitcoin dominance reached its all-time low and bottomed out at around 40% from May 2021 to November 2022, its dominance has continued to soar. The rise of $BTC to $73,800 in a very short period of time certainly had to do with the leading cryptocurrency maintaining its dominance over altcoins.
The $BTC price is currently trying to find a bottom against the US Dollar, and if it does, it could have the effect of energizing the battered altcoin sector.
Week 5 of Rejecting Domination
Source: TradingView
The Bitcoin Dominance weekly chart shows a 57.5% resistance level. This does not mean that the dominance cannot break above resistance and move higher, but it is possible that the dominance will fall as there has been a 5-week rejection.
The Stochastic RSI at the bottom of the chart is also indicating downward momentum.
Altcoin Market Cap Starts Breaking Trend
Source: TradingView
Total3 chart is the combined market cap of all cryptocurrencies except $BTC and $ETH. This shows that the altcoin market cap is bullish. There is a strong horizontal support level, which also coincides with the 0.618 Fibonacci. The market cap value has already fallen to this level in early August, testing this level as support.
At the bottom of the chart, there is a relative strength index that indicates overbought and oversold conditions. The indicator line is below the 50 level, indicating oversold conditions. You can also see that the indicator has broken through the downtrend and retested it. The orange line indicates strong support and resistance levels, and you can see that support is being found here.
Moving on to the altcoins with the biggest upside potential
When Bitcoin finally reverses its downtrend, the best performing altcoins are likely to run even stronger. Identifying the right altcoins to start building positions on can be the difference between a modest profit and potentially huge gains.
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be legal, tax, investment, financial or other advice.
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