Bitcoin ($BTC) might attempt a push towards a new local high at $50,000 or opt to consolidate around the current price range. The latter scenario could hold significant positive implications for altcoins.
The bitcoin dominance chart plays a crucial role in assessing potential movements in altcoin prices. Presently, the chart displays signs of weakness, marked by a lower high followed by a lower low in dominance. This leaves the overall market distribution at a pivotal point.
A breach of support at 51% in bitcoin dominance could lead to the next support zone, just below 49%. Further down, major support levels stand at 44.4% and, in an extreme scenario where altcoins strongly resist against $BTC, 39% would become a critical support level.
Although reaching the lower support levels seems unlikely in the near term, a decline in dominance to 49% could offer altcoins an opportunity to strengthen their prices against bitcoin, at least temporarily.
The upward trend for altcoins remains intact when observing the next chart (market cap of all altcoins excluding BTC and ETH). Despite occasional deviations in early January, altcoins have consistently returned above the trend line.
A breakthrough above the resistance at $498 billion in the chart could trigger significant upward movements for many altcoins. This impending moment holds significance, potentially influencing the onset of an altcoin season.
As the market anticipates the next move, it is evident that the current crypto bull market is as exhilarating as its predecessors. To capitalize on it, aspiring traders should equip themselves with market knowledge and, importantly, implement effective risk management strategies for potential market downturns.
