Bitcoin Dominance has fallen from 66% to 58% over the last 10 weeks. Is this reduction in dominance set to continue, or could a return to the Bitcoin bull run pull money out of the altcoins and back into Bitcoin?
Bitcoin Dominance up or down?
Source: TradingView
The above weekly chart for Bitcoin Dominance shows the long upward trend from the end of 2022 to the eventual break of trend earlier in August. The trend break was confirmed, and dominance came as far down as 57.6% at one point. A slight rally has taken place since then, but this has met resistance at 58.5%. Will dominance continue to fall, at least to the support at 57%, or the next strong support at 55%?
At the bottom of the chart, the Stochastic RSI shows the indicators right at the bottom of their range. This is the case with the 2-week chart, while the monthly is also on its way to the bottom.
This needs to be set against the short term Stochastic RSI indicators, which are mostly at their tops and generally about to fall back down. This would possibly suggest that at least for the next week or two, Bitcoin Dominance might continue to fall.
However, the longer term view is that dominance could start to rise again. Although it must be borne in mind that as the crypto bull market progresses it might be expected that value does start to leak out of Bitcoin and into the altcoins.
The reason for this? Unless there is the most ridiculous blow-off top for Bitcoin, where it soars well in excess of $200,000, it would generally be accepted that Bitcoin is not going to make multiples of its present price in this bull run. On the other hand, some of the altcoins can probably gain several multiples of their current value. Many investors will see this and transfer out of at least some of their Bitcoin into alts.
Some altcoins like $SOL could outperform
This said, there is probably a middle ground for investors seeking a safer path. A small handful of the best-performing altcoins have already started to outperform $BTC. Solana (SOL) is one such example.
Source: TradingView
The SOL/BTC chart shows how $SOL bulls are currently working towards turning the trend back up against $BTC. It can be seen that SOL/BTC has come up against the strong resistance at 0.0018 BTC. If $SOL can break through here and confirm above, the trend in favour of $BTC could be broken if $SOL takes out the higher high at 0.003 BTC.
Bearing in mind that $SOL recently went through a phase where it was really beaten down, the current upward impulse wave has a great chance of sending $SOL much higher. This is to say nothing of the impending possibility of around 9 Solana Spot ETFs being granted in October. Watch this one closely.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
