Altcoin Season Brewing as BTC Dominance Tests Key Breakdown Level?

Key Insights:

• Altcoin Season Index is still close to 30, indicating Bitcoin dominance.
• BTC Dominance tests long-term resistance similar to the 2021 setup.
• Analysts cite wedge and fractal patterns indicating rotation.

Altcoin season talk is trending in crypto markets as traders search for indications of capital rotation. Several analysts are pointing to technical patterns that have previously preceded major altcoin rallies. However, the Altcoin Season Index remains subdued and continues to signal that Bitcoin is leading the market.

Altcoin Season Index Still Indicates Bitcoin Control

The Altcoin season Index is currently about 30 out of 100, which clearly indicates a Bitcoin season rather than an altcoin season. Traders tend to seek signals above 75 as confirmation that altcoins are performing broadly better than Bitcoin. Since the Index is still well below that threshold, recent gains in individual tokens haven’t translated into general altcoin strength.

One chart shared by trader Klarck is focused on Bitcoin dominance as it tests a long-term trendline. He puts the current setup in the context of a support test, which could lead to a short dip and a consolidation phase. The structure is compared to 2021, where a rejection at similar levels triggered a sharp rotation into altcoins.

Klarck noted that Bitcoin’s dominance fell by about 42% in the last cycle. He speculates that a 38% drop could occur if the trend repeats. Even so, the trendline test is not the same as a confirmed breakdown. Until dominance starts to fall decisively, the Altcoin season Index will probably stay in the territory of Bitcoin.

Falling Wedge Suggests Potential Expansion

Another analyst, Mark Chadwick, is tracking a multi-year falling wedge in the altcoin vs. Bitcoin ratio. The chart implied long-term compression, which can often precede expansion phases. According to Chadwick, sentiment is still weak, and pessimism could provide a constructive base for a breakout.

The theory is based on the idea that altcoin cycles tend to repeat over several years. Bitcoin tends to dominate the early phase of a bull cycle, while altcoins pick up momentum later. If the fractal holds, capital rotation could intensify after Bitcoin stabilizes.

However, fractal analysis offers context rather than certainty. Market conditions, liquidity, and macro developments may change historical patterns. The key is whether the $OTHERS/BTC ratio supports and starts trending upwards. A sustained uptrend would be a sign of relative strength in altcoins.

If support breaks, the fractal story weakens. Traders, therefore, combine such cycle studies with tools such as the Altcoin Season Index to measure breadth.

Head and Shoulders Warns of Downside Risk

Meanwhile, a more cautious outlook comes from BitcoinSensus, which noted a head-and-shoulders pattern in the total crypto market cap excluding BTC and ETH. The neckline appears to have broken, suggesting a move toward about $513 billion.

If that measured move plays out, altcoins could face some more downside before any sustained rally develops. This bearish formation coincides with the current reading of the Altcoin Season Index, which currently still favors Bitcoin dominance.

The post Altcoin Season Brewing as BTC Dominance Tests Key Breakdown Level? appeared first on The Market Periodical.