Is Altcoin season back as Bitcoin dominance falters?

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Altcoin (ALTCAP) market capitalization rose significantly yesterday and broke out of a descending resistance line. This was combined with an increase in the Bitcoin Dominance Rate (BTCD).

The increase in ALTCAP is expected to continue in the short and long term. On the other hand, while the short-term trend of BTCD is bearish, the long-term one is still unclear.

Altcoin Season Hopes Recover as Altcoin Cap Begins Upward Movement

The daily technical analysis of the period for the market capitalization of Altcoin gives a bullish reading. ALTCAP has been rising since bouncing off the $500 billion horizontal support zone on June 15 (green icon).

On June 30, it broke out of a descending resistance line. It was a sign that the previous correction was over. Then, ALTCAP returned to validate the line as support on July 7 (green icon) before further accelerating its pace of progress.

The daily RSI legitimizes the breakout and supports its continuation. When assessing market conditions, traders use the RSI as a momentum indicator to determine if a market is overbought or oversold and to decide whether to build or sell an asset.

If the RSI reading is above 50 and the trend is up, the bulls still have an advantage, but if the reading is below 50, the reverse is true. The indicator is above 50 and moving up, two signs of an uptrend.

Currently, ALTCAP is trading above the $0.618-$600 billion Fib retracement resistance level. The principle behind Fibonacci retracement levels suggests that after a considerable price move in one direction, the price will retrace or partially retrace to a previous price level before continuing in its original direction.

This is another bullish sign since the 0.618 Fib level often acts as the local top if the breakout is just a relief rally.

ALTCAP/USDT daily chart. Source: Trading View

ALTCAP may reach a new annual high of $700 billion if the increase continues. However, if ALTCAP were to close below the 0.618 Fib level, a drop to the next support at $540 billion could occur.

Bitcoin (BTCD) Dominance Rate Weakens After Rejection

The Bitcoin dominance rate broke out from the 58% zone at the start of June. Then, it reached a new yearly high of 52.15% at the end of the month.

However, BTCD was rejected by the resistance level at the 0.382 Fib retracement at 52.15%. It is currently creating a large bearish weekly candlestick.

If the decline continues, BTCD may fall back into the 48% zone. The region is now expected to lend its support.

Once there, the reaction will likely determine the direction of the future trend. If BTCD rebounds, it may resume its 58% uptrend.

However, if it breaks down, it will mean that the previous breakout was not legitimate and new lows will follow.

BTCD weekly chart. Source: Trading View

Despite this short-term bearish forecast, closing above the yearly high of 52.15% will mean that the trend is still bullish. In this case, BTCD will likely immediately increase to 58%.

For the latest crypto market analysis from BeInCryptos, click here.

Disclaimer

In accordance with Project Trust guidelines, this price analysis article is provided for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased reports, but market conditions are subject to change without notice. Always do your own research and consult a professional before making financial decisions.

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