Analysts Predict Bitcoin’s Market Dominance May Decline to 40%, Signaling Potential Altcoin Rally

As of April 2025, cryptocurrency markets are witnessing a potential paradigm shift as Bitcoin’s dominance index shows signs of weakening. Market technicians observe that BTC’s share of total crypto market capitalization could drop to 40% in the coming months, a level not seen since the previous market cycle. This development suggests capital may rotate into altcoins, potentially creating favorable conditions for Ethereum, Solana, and other major Layer 1 protocols. The dominance decline coincides with growing institutional interest in diversified crypto portfolios and comes as several altcoins approach critical resistance levels. Traders are watching the 40% threshold closely, as sustained movement below this level could confirm the beginning of a prolonged ’altseason’.

In Brief

• Bitcoin dominance has reached 63.2% of the crypto market, its highest level this year.
• Technical analysis forecasts a possible drop to 40%, even 34.9%.
• Cryptocurrencies like Ethereum, XRP, Cardano, Chainlink, BNB, and Litecoin would be the first beneficiaries.
• The context differs from previous cycles due to Bitcoin ETFs.

A Major Technical Resistance Signaling a Turning Point

The weekly candlestick chart shows that Bitcoin dominance is approaching a critical historic resistance level. 

This phenomenon has happened before, and every time this descending trendline has been reached, a major reversal occurred. 

The technical analysis suggests that history could repeat itself, with a potential drop to 40%, or even 34.9% in the most bearish scenario.

Unlike previous cycles, Bitcoin dominance has followed a different dynamic this time. It has significantly increased since the start of the current cycle, leaving little room for the much-anticipated altcoin season by many investors. 

This phenomenon is partly explained by the growing institutional adoption of Bitcoin, notably through Spot ETFs.

Which Altcoins Would Benefit from a Decline in Bitcoin Dominance?

A decrease in Bitcoin dominance would mean the altcoin market outperforms the leading crypto. 

In such a scenario, the first to benefit would likely be established cryptos that have withstood multiple market cycles, commonly known as “DINO” (Dinosaurs In Name Only), notably Ethereum, XRP, Cardano, Chainlink, BNB, and Litecoin.

However, the current context differs significantly from the bullish markets of 2017 and 2021. The market now has thousands of altcoins, compared to just a few hundred in previous cycles. 

Moreover, the presence of Spot Bitcoin ETFs, which lock up significant long-term liquidity, could limit the Flow magnitude toward altcoins.

Beyond large-cap cryptos, certain specific sectors such as artificial intelligence, tokenized real-world assets (RWA), and decentralized finance (DeFi) could also attract investor attention. 

Nevertheless, even within these categories, a rigorous selection process will be required to identify the most promising projects.

The potential drop in Bitcoin dominance could therefore mark the beginning of a new phase in this market cycle, where altcoins gradually regain their attractiveness to investors.

Maximize your Cointribune experience with our "Read to Earn" program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.