- Altcoin dominance has fallen to a historical support level that often precedes major rallies
- However, Bitcoin’s dominance has soared past 64%, driven by strong institutional demand
- Technical charts suggest altcoins are in a long-term accumulation zone despite weak sentiment.
Altcoins have had a rough few weeks, with most prices stagnating or falling even as Bitcoin continues to trades close to its all-time high as sentiment across the space slips with many investors beginning to question if holding onto altcoins is worth the wait.
Market sentiment has soured significantly in recent weeks as most altcoins bleed value. This growing divergence between Bitcoin and the rest of the market has pushed key metrics to critical levels, suggesting a major market shift could be on the horizon.
Altcoin Dominance Hits Historical Support
According to analytics firm Alphractal, altcoin dominance—excluding stablecoins—has hit historical support near 25%, and when excluding Ethereum, the support lies around 18%.
These levels have, in past cycles, marked the beginning of strong altcoin rallies. In both cases, they reflect a point where altcoins tend to stop bleeding market share and start gaining ground against Bitcoin.
While this doesn’t guarantee an imminent “altcoin season,” these levels have historically preceded major pivots in sentiment and price movement across the broader altcoin market.
Related: Market Greed Index at 68: Is It Justified Amidst Sideways Trading and Geopolitical Fears?
Bitcoin’s Long Shadow and Institutional Pull
On the other hand, Bitcoin dominance continues to surge, recently climbing above 64%—its highest in years. Crypto analyst Daan Crypto has noted that treasury institutions and ETF flows are driving Bitcoin demand, leaving little room for altcoins to capture market share in the short term.
Unlock schedules, low liquidity, and insufficient spot buying interest are weighing heavily on altcoin performance. Even Ethereum’s short squeeze last month failed to ignite follow-through buying, a worrying sign for those expecting a rotation into alts.
Daan’s warning is stark: “Pick your altcoins wisely. Most will underperform BTC over the longer term.” His view is supported by data from BlockchainCenter, which confirms it is still very much “Bitcoin Season”—with only 10 out of the top 50 coins outperforming BTC over the last 90 days.
Technicals Suggest Accumulation Zone for Long-Term Gains
The Total 3 market cap chart (crypto excluding BTC and ETH) shows the market is hovering near the 0.382 Fibonacci level (~$830 billion)—a critical support zone. This level has acted as a bounce point in the past and continues to hold despite several attempts to break lower.
Related: Good Asset, Bad Buy? Analysts Warn Price Alone Doesn’t Equal Value
Short-term momentum is weak as the RSI is stuck around 46, below the bullish threshold of 50. Also, the MACD is in bearish territory. Still, long-term Fibonacci extensions offer compelling targets of 1.618 extension at $963 billion, 2.618 at $1.06 trillion, and 4.236 at $1.21 trillion.
While current sentiment is bleak, especially among small-cap and mid-cap altcoin holders, historical and technical evidence suggest capitulation now could mean missing out on the next explosive leg higher.
Bitcoin dominance is indeed a headwind, touching all-time highs, but this often precedes, not prevents, altcoin rotations.
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