Recently, the overall cryptocurrency market has shown signs of weakness. After hitting a market capitalization peak of $3.73 trillion on December 16, it has since declined by $500 billion to $3.23 trillion.
Altcoins have experienced the most significant impact, while Bitcoin has maintained a relatively stable position.
Over the last 24 hours, market activities have not slowed down. Trading volume has decreased by 32.39% to $120.09 billion, and Bitcoin’s dominance has reached 60.30%.
The analysis conducted by CryptoCrypto indicates that the current market conditions are not favorable for a bullish scenario for altcoins.
Market Dominance Defies Historical Patterns
According to Rekt Capital, the ongoing movements in the Bitcoin Dominance chart do not align with past trends.
Bitcoin Dominance represents the proportion of the total cryptocurrency market capitalization that belongs to Bitcoin compared to other cryptocurrencies.
Typically, a rise in Bitcoin Dominance suggests a slowdown or pause in altcoin movements, and vice versa.
Based on the analyst’s findings, on the previous occasions in September 2022 and August 2023, when BTC Dominance dipped into a specific support zone on the RSI chart, altcoins were on an upward trend, with several cryptocurrencies achieving new highs.
However, there has been a shift in market dynamics since then, particularly with BTC Dominance gaining slightly more than 6%.
This shift indicates that investment interest has started to flow back towards Bitcoin, signaling a potential end to the altcoin rally.
Could There Be an Opportunity for Altcoin Purchases Ahead?
Presently, Glassnode’s “percent of supply in profit,” which gauges the profitability of 29 altcoins, shows that only 32% of these altcoins are in profit, leaving about nine assets in a profitable position.
Nevertheless, there is a chance for other altcoins to turn bullish if they adhere to the bottom trendline illustrated on the chart. This shift could impact the overall market sentiment.
If the bottom trendline remains respected and prices move upward, there is a significant possibility that there is still potential for an altseason. Historically, each time the trendline is tested, a market upswing emerges.
Another Positive Signal
CryptoCrypto has identified another bullish correlation that supports the notion of profitable supply: the recent reaction from the ETH/BTC chart at a support level indicates a potential upward trend.
Typically, when ETH/BTC experiences a rally, it signifies that liquidity is flowing into altcoins, with ETH absorbing most of the market liquidity, leading to a price surge.
On the contrary, if the ETH/BTC ratio declines, it suggests that Bitcoin is attracting more liquidity, which could keep altcoins stagnant or drive their prices downwards.