- Bitcoin dominance is nearing the top of a multi-year ascending channel, signaling a possible breakdown.
- Altcoin market (TOTAL2) is holding key Fibonacci support and showing early signs of accumulation.
- A BTC dominance breakdown could trigger a wave of capital rotation into altcoins, fueling an altcoin season.
After two years of a powerful uptrend, Bitcoin’s dominance over the crypto market may be about to turn. According to analyst @el_crypto_prof, cracks are beginning to form in a long-standing pattern on the BTC dominance chart, a development that could signal the start of a massive rally for altcoins.
The analyst warned that “this thing will break to the downside sooner or later — and then you will see altcoins reach unimaginable levels in no time,” noting that an altcoin season is very likely in the near future.
BTC Dominance Chart: Cracks Are Forming
The weekly BTC dominance chart shows a rising channel stretching back to early 2023, marked by consistent higher highs and higher lows. Every touch of the upper and lower trendline has historically resulted in reversals.
However, as Bitcoin’s share of the crypto market approaches the upper bounds of this structure once again, currently around 65.8%, risk of a downside breakout is growing.
A confirmed channel breakdown could serve as an ideal signal for traders, with a downside target (TP1) near the 58% zone. Such a breakdown would imply capital rotation away from Bitcoin and into altcoins.
Related: With June Almost Over, Here Are the Altcoins to Watch Closely in July
TOTAL2 Chart: Altcoins Quietly Building Momentum
Meanwhile, the TOTAL2 chart paints a cautiously optimistic picture. Currently sitting at $1.11 trillion, TOTAL2 is holding above the 0.382 Fibonacci retracement level from the previous move ($1.11T), with higher lows forming since the May correction.
The price action has yet to make a decisive move, but the setup suggests that any weakness in BTC dominance could be the catalyst altcoins need.
On the other hand, the RSI is hovering around 43, signaling neutral to slightly oversold conditions. If RSI climbs above 50 on rising volume, it could confirm a trend shift.
Related: Analyst Eyes $160 As The Potential Target For Solana
Further, the Balance of Power indicator is still below zero but has shown bursts of accumulation–an early sign of buyer interest returning.
If TOTAL2 continues higher, potential Fibonacci extension targets lie at $1.4 trillion (1.618 level) and $1.64 trillion (2.618 level). These levels mark critical resistance zones that, if broken, could unlock exponential upside for altcoins.
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