Bitcoin (BTC) dominance appears poised for further decline, with multiple technical signals aligning to support a bearish continuation.
According to pseudonymous crypto analyst Master Ananda, Bitcoin’s recent breakdown from a long-term uptrend, accompanied by the highest weekly volume since February 2021, suggests a potential altcoin resurgence reminiscent of the early stages of the last major bull run, he said in a TradingView post on July 23.
The Bitcoin Dominance Index currently sits at 61.42%, following a sharp rejection at the 64.35% level, which has emerged as strong resistance on the weekly chart.
The failed breakout attempt left behind a notable bearish engulfing candle, indicating weakening momentum in BTC’s relative strength versus the broader crypto market.
Bitcoin dominance now hovers just above key Fibonacci levels at 61.65% and 60.30%. Failure to reclaim former support, now acting as resistance, reinforces the bearish outlook.
Therefore, a decisive drop below 58.94% could open the door for further declines toward 57.01%, and potentially 47.44%, creating room for altcoins to gain traction.
Ananda drew comparisons to February 2021, when a high-volume breakdown in Bitcoin dominance preceded a widespread altcoin rally.
Bitcoin dominance short-term play
Current technicals suggest a similar setup, with Bitcoin likely to enter a consolidation phase as altcoins gather strength. While short-term pullbacks may occur, they are viewed as opportunities to reposition, with firm resistance and tightening timeframes pointing to an imminent decline in BTC dominance.
Similar sentiments were echoed on July 28 by cryptocurrency trading expert Michaël van de Poppe. He noted that the Bitcoin dominance chart is flashing clear signs of sustained downside pressure, with a powerful bearish divergence continuing to weigh on the trend.
Poppe’s analysis indicated that Bitcoin’s technical indicators suggest its outperformance over altcoins may be waning, at least in the near term.
Notably, previous bearish divergences in Bitcoin dominance have consistently signaled short-term reversals, often triggering altcoin rallies.
The latest divergence, which began forming in early June, has now been confirmed with a breakdown below the 52.50% level, pointing to further downside. While minor rebounds remain possible, the overall structure and declining RSI suggest momentum is shifting in favor of altcoins.
As of press time, Bitcoin remained in consolidation just below the $120,000 mark, trading at $118,277, up 0.16% in the past 24 hours but down 0.76% on the weekly timeframe.
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