What is Bitcoin Dominance? (Are We In Altseason?)

**Nick Valdez** (0:00)
What is Bitcoin dominance, and is it predicting alt season? And is there another chart that's even better at predicting alt seasons? And Bitcoin dominance is just when money leaves the Bitcoin ecosystem and finds its way into Ethereum or other altcoins. And we're going to look at the Bitcoin dominance chart as well as a different chart, and that's the Others chart, and I'll explain that in a second. Now Bitcoin dominance is a metric measuring Bitcoin's market cap as a percentage of the total cryptocurrency market cap. It indicates capital flow, or the money that flows between Bitcoin and altcoins, and it acts as a market thermometer for investor sentiment. Now when Bitcoin dominance is high, it usually means a flight to safety, and when Bitcoin dominance is low, indicates higher risk appetite, aka alt season. And I love this graphic right here. When Bitcoin dominance increases and Bitcoin price decreases, that's when you're going to see altcoins dump. But if Bitcoin dominance takes a dump and Bitcoin price increases, that's when your altcoins pump. Let's go ahead and look at the Bitcoin dominance chart, then I'll share the chart that I think is even more accurate here. Now, signs for an alt season, aka Bitcoin dominance falling. So let's talk about the scenario where Bitcoin dominance is going to fall. We can zoom out here. You can see right now Bitcoin dominance roughly 59%.
Last cycle, this is 2019 This is going to be 2021 January. Bitcoin dominance was high as 74%.
And when Bitcoin dominance did a little bit of a bloodbath here, Bitcoin dominance got as low as 38%.
So what's the argument for alt season, aka Bitcoin dominance falling? So number one, we have 60% resistance. There is strong, strong resistance at 60%.
You can see right here, we are knocking all against it. And I can throw down a horizontal line. So we can see a little more clearly, couldn't pass this range. And so there's a decent odds that we will reject from this range. You see, we try to pass it there. You can go back multiple cycles and see the impact of 60% right here. And so this is a long, this is weekly candles. It's a long holding number here. It's long been a line in the sand. So 60%, we could see a rejection. Now also sign for an alt season, aka this might break down daily bearish divergence. Let's switch to the daily chart here. Zooming in on the RSI.
You can see RSI heading lower as the price was heading higher. This could be a little bit of sign of a bearish divergence. So just another sign that we might see a correction here. And last but not least, Clarity Act. If we pass the Clarity Act, it's bullish for all of crypto, but it's more bullish for DeFi and alt coins than it is for Bitcoin. And Senator Tom Tillis says we could solve some of the disputes this week. So non-zero-percent chance, Clarity Act is going to get some serious momentum. That is going to be not great for Bitcoin dominance, I think in the long run. But let's also do the counter argument, and I'll share the better chart in a second here. Now signs for Bitcoin season, aka this number goes up. Now we broke a trend line, but everything in the parentheses is going to be a but. So the but, maybe we still get alt season. We broke the trend line, but it's a weak trend line. We just hit the top there.
This is the 10-10 wick, a dubious wick. Maybe not even the best wick. Maybe even a wick we shouldn't be paying attention to.
If you hit the wick right there, you see, we broke this resistance, but to me, it's a weak trend line. Dubious, dubious resistance. Number two, typically, you know, it reverses on three-day bull divs. Let me pull up the three-day chart. Let me pull up the RSI here. It's a slight, right? You can see the price slightly heading lower, slightly. But if you look at the bottoms here, the bottoms are heading slightly higher. So, you know, normally we do see a three-day bull div, you know, reversion here, but it could be a lower low next. But, so let me show you the but here. That's not how I wanted to say that, but right here, same scenario, potentially playing out. We have a bull div. You can see, you know, making lower lows on the dominance here. RSI was making higher lows. We would end up doing another dump. We would end up doing another flush. So potentially a lower low could be in the cards. This was a great time to hold altcoins. And in case you were wondering, let's just say look at ETH during this time. So this is going to show you the power of Bitcoin dominance breaking down. This is December 6th to January 13th. December 6th to January 13th. December 6th. Oh man. Oh man. Right here, ETH is $400.