Tracking Bitcoin’s dominance and how investors can prepare themselves

• By various measurements, Bitcoin has been outperforming the altcoin market
• Clues for a change towards an altcoin season can be gleaned from Bitcoin Dominance, as well as the ETH/BTC chart

Bitcoin [BTC] was trading at $104.9k at press time. The December and January local highs at $106.2k (1-day trading session close) was respected as a resistance level once again over the past few days.

Thus, even though the 1-day structure of BTC was bullish, there may be a chance of a rejection and retracement towards the $102k support. During the time that Bitcoin was trying to set new highs over the past two weeks, the altcoin market has not fared well.

The Altcoin Season Index revealed a reading of 16, meaning that we are deep in Bitcoin season.

The last time the index scored above 75 was in early December 2024. However, this did not last very long.

Bitcoin dominance at highs not seen since 2021

Bitcoin Dominance refers to the share of the total crypto market cap that BTC possesses. At press time, this share was 64.18%. The weekly dominance chart highlighted that it has been predominantly Bitcoin season since mid-2023.

Over the past month, BTC.D has managed to flip the 63.8% level to support – A level that previously served as support in 2020. This suggested that the dominance was likely to continue to grow. In fact, the next targets now are 67% and 70%.

Tracking the performance of ETH against BTC can also help gauge the altcoin market’s performance. Generally, rising Ethereum prices spur altcoins to outperform Bitcoin, leading to an altseason.

According to the ETH/BTC chart, the last altseason was in April-June 2021. The heaviest BTC.D drop was in March-May 2021. This overlap hinted at the importance of ETH/BTC in gauging altcoin trends.

The ETH/BTC bounce in early May came alongside a nearly 20% swell in the altcoin market cap. While the chart was still on a downtrend at press time, a move past 0.026 might be an early indication that alts are worth watching. Until then, risk-averse investors would want their capital parked in Bitcoin.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion