Summary:
- Bitcoin’s dominance tested 73% on January 3rd
- This level was last seen in September of 2019 and is a crucial resistance area
- If Bitcoin pushes above this level, altseason will be postponed
- Conversely, if Bitcoin corrects and fails to break the 73% dominance, alts might just thrive
The King of Crypto, Bitcoin (BTC), has just set a new all-time high value of $35,776 – Binance rate. Such a feat by Bitcoin is usually accompanied by capital moving out of altcoins and into BTC as traders attempt to ride the wave up to new all-time high levels.
Bitcoin Dominance of 73% Will Determine the Fate of Alts
Such an event was witnessed on January 3rd as Bitcoin set the previous all-time high of $34,800. On this day, Bitcoin’s dominance went as high as 73.71% (according to Tradingview) before falling back to 68% the following day.
The 73% Bitcoin dominance level was last witnessed in September of 2019 and is a crucial resistance area that will determine the fate of altcoins as explained by MagicPoopCannon below.
Simply put, if BTC breaks out above it, there is a very high probability that BTC dominance could explode well above 90%. Will we see that, or will we see a new alt season? We really have to wait to see if BTCdominance will have a sustained rejection there, or if it will resume it’s march to the upside, to take out that blue trendline resistance.
Bitcoin’s Dominance Might Skyrocket as the SEC Cracks the Whip on Crypto Projects
Magic goes on to postulate that the Bitcoin dominance will continue to increase in the scenario the SEC continues on its crusade of suing crypto projects on the basis of carrying out unregistered securities offerings.
…if the SEC can deem that XRP is a security, they can deem the same thing for the majority of the altcoins too, which could bring cascading pressure on the alt space, fueling a rotation into BTC, which doesn’t have that particular risk. Now, I’m not saying that’s going to happen, but I’d be willing to bet the SEC is coming for way more than Ripple and XRP. It’s just a theory, but a plausible one IMO.
Conclusion
Summing it up, the highly anticipated altseason is reliant on Bitcoin failing to break the 73% dominance area. If Bitcoin does indeed correct in the days to follow, it will open the doors for a scenario where BTC profits flow into alts in a standard altseason.
However, if the SEC announces another lawsuit against a crypto project, the Bitcoin dominance will most likely skyrocket thus postponing the aforementioned altseason.