Bitcoin’s dominance hit 60.5% this week, putting pressure on altcoins. But analyst Benjamin Cowen says a shift in the market may soon favor altcoins.
Cowen said in a post on X that the “grand finale of the altcoin reckoning has finally arrived.” He thinks this “reckoning” could end as early as December, suggesting that altcoins may be experiencing one last dip before a major rebound.
Cowen shared a chart showing two notable “Altcoin Reckoning Grand Finale” zones. The first happened in early 2020 when the altcoin market cap broke through a critical support level. This led to a consolidation period followed by an upward trend.
Now, a similar situation is emerging in the last quarter of 2024, where altcoins are again approaching this key support level against Bitcoin. This could be a potential bottom or inflection point for altcoins.
Essentially, Cowen’s insights suggest that the ongoing decline of altcoins relative to Bitcoin might be almost over, potentially ending by January 2025.
Historically, rising Bitcoin dominance has meant declines in altcoins as more liquidity flows into Bitcoin. But, if Bitcoin’s dominance reaches the projected rejection zone and stabilizes, it could give altcoins a chance to recover.
Three Indicators to Watch for Altcoin Recovery
In a separate discussion, analyst Cryptorphic explained the support zones for Bitcoin and altcoins. He pointed out that currently, altcoins are down between 20% and 40% from their recent highs, a trend he believes aligns with typical market patterns during Bitcoin-led rallies.
At the same time, Bitcoin’s dominance is at 60.51%. According to Cryptorphic, Bitcoin’s dominance could face rejection between 64% and 65.8%, potentially triggering a shift back to altcoins.
Cryptorphic highlighted three key indicators that could support an altcoin recovery. He said Bitcoin dominance must reach the rejection zone, Bitcoin must close above its monthly resistance level of $71,378, and altcoins must hold their support levels on higher time frames.
These factors could set the stage for a broader market rally, allowing altcoins to recover and gain value relative to Bitcoin.
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Source: https://coinedition.com/altcoin-reckoning-nears-end-as-bitcoin-dominance-rises-says-analyst/