Bitcoin Dominance Nearing Its Peak? Here’s What Traders Should Brace For

Bitcoin's market dominance shows cracks—altcoins are licking their chops.

When the king wobbles, the courtiers pounce. Bitcoin's grip on crypto's total market cap has slipped below 50% twice this year, sparking debates about an impending 'altseason.'

DeFi tokens and layer-2 projects gained 18% on aggregate last quarter while BTC stalled. Ethereum's Shanghai upgrade siphoned another $4B in institutional capital away from digital gold.

Traders eyeing the 200-week moving average like technical vultures. A decisive break could trigger algorithmic sell-offs—just in time for Wall Street's annual 'crypto is dead' August op-eds.

Remember: markets move faster than your favorite influencer's hot takes. And yes, that includes the guy who's still waiting for his '100K BTC by 2021' prediction to materialize.

Key Takeaways

Ethereum has managed to outperform Bitcoin since April, and the ETH/BTC breakout on the higher timeframes was a sign of strength for ETH. However, it does not translate to weakness on the part of Bitcoin.

Ethereum [ETH] has rallied 44% from its lows in early July, at $2,373. It was trading at $3,426 at press time, and increased institutional demand and spot ETF inflows could drive the rally even higher.

Source: ETH/BTC on TradingView

On the weekly chart, ETH/BTC appeared to have turned a corner. It made a bullish structure break after climbing past the local resistance at 0.02629, and was challenging the 0.02968 level. A breach of the second resistance could set up an uptrend on the ETH/BTC.

The ETH/BTC tracks the value of ethereum in terms of Bitcoin [BTC]. It has been in a severe downtrend since 2023, a descent that turned into a freefall since the summer of 2024.

Now, with the rising demand for Ethereum, the past two months saw this trend begin to reverse.

In a post on X, crypto analyst Matthew Hyland stated that the ETH/BTC uptrend could have repercussions for the bitcoin Dominance (BTC.D).

He explained that if ETH/BTC can maintain its bullish bias, then “there is a 99% chance BTC Dominance has topped”. While that is true, there was one factor that traders and investors must account for.

Does a bullish ETH/BTC mean the Bitcoin rally is over?

Source: BTC.D on TradingView

While the weekly chart of ETH/BTC showed signs of an uptrend, the BTC.D on the weekly chart has not broken out of its bullish trend. It has been forced to the higher low at 62.4%, but no decisive structural break yet.

This break will come once ETH/BTC continues higher, argues analyst Hyland.

AMBCrypto agrees, but the key component for traders and investors to consider is time. These moves will take time, and they do not automatically mean that the Bitcoin rally has halted.

It is possible that even after the ETH/BTC breakout, there will be weeks when it has a pullback or faces periods of consolidation.

This could be the time when Bitcoin is pushing higher. Therefore, while a topped BTC.D was great news for altcoin investors, it does not mean that Bitcoin holders should sell their bags.

Rather, the next few months could see significant gains across the crypto market, the final leg of the bull run after the halving in April 2024.