Is Altseason Over? Bitcoin’s Dominance Could Rebound, Analyst Warns

TLDR

• Bitcoin’s dominance has fallen significantly from 65.58% to 58.15% due to Ethereum’s recent surge.
• Analyst Benjamin Cowen predicts that Bitcoin’s dominance will likely rebound based on historical price patterns.
• One possible scenario for a dominance rebound is Bitcoin bouncing off the 20-week simple moving average (SMA).
• Another scenario involves Bitcoin falling below the 20-week SMA and reaching the 50-week SMA, causing altcoins to suffer.
• Cowen suggests that if Bitcoin consolidates around the 20-week SMA, altcoins could experience a slow decline.

Bitcoin’s dominance in the cryptocurrency market has fallen from 65.58% in July to 58.15% recently. This drop comes as Ethereum experienced significant growth, reaching a new all-time high in August. However, prominent analyst Benjamin Cowen predicts a reversal in this trend, suggesting that Bitcoin’s dominance could rise again.

Bitcoin’s Potential to Bounce from the 20-Week SMA

Cowen believes Bitcoin’s dominance will increase if it bounces from the 20-week simple moving average (SMA). The 20-week SMA is a crucial level that signals potential price movements. In 2017, Bitcoin showed a similar pattern, where it bounced from this level, leading to a surge in dominance.

Currently, Bitcoin is trading at $107,922, slightly below the 20-week SMA of $108,969. If the price reacts positively and moves higher from this level, Cowen expects Bitcoin’s dominance to rise, pushing altseason into jeopardy. He emphasized that this historical pattern indicates the possibility of a significant rebound for Bitcoin’s dominance.

The second possible scenario Cowen outlines is a decline below the 20-week SMA, similar to past trends. He points to Bitcoin’s behavior in 2024, when the price fell below the 20-week SMA and continued downward. In August and September 2024, Bitcoin reached the 50-week SMA, showing a strong downward movement.

Cowen predicts that a similar decline would lead to a substantial retracement in altcoin prices, with altcoins potentially losing more than 30%. Bitcoin would likely head towards the 50-week SMA, which currently stands at $95,860. This scenario would not only pause the altseason but could lead to a prolonged period of Bitcoin dominance.

Altseason Faces Delay as Bitcoin Dominates

The final scenario Cowen presents is a period of consolidation around the 20-week SMA. He suggests that this could be a continuation of the trend observed in 2022, where Bitcoin’s price remained near the 20-week SMA. If this happens again, altcoins will likely experience a gradual decline.

While Bitcoin consolidates at these levels, altcoins may face a slowdown in price growth. This would delay the much-anticipated altseason, as Bitcoin’s market share rebounds. Cowen concludes that despite the direction Bitcoin takes, its dominance will likely rise in the near future.

Bitcoin’s price reaction to these key moving averages will play a pivotal role in determining whether altseason continues. If Bitcoin rebounds from the 20-week SMA, its dominance will likely push altcoins lower. However, if Bitcoin breaks below this level, altcoins could see a sharper correction, ending their outperformance. In either case, Bitcoin’s dominance is expected to increase, potentially delaying the start of altseason.

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