Technical analysis of the BTC.D chart is pointing to a tip in balance that might lead to a crash in Bitcoin’s crypto market cap dominance.
Analysts on X are pointing to signals on the Bitcoin dominance chart that could precede a sharp downward move, one that could have a massive effect on how liquidity rotates into the altcoin market. The latest outlook came from crypto analyst Cryptoinsightuk, who highlighted the current state of the weekly Bollinger Bands indicator on the BTC.D chart as a reason why BTC’s dominance is about to experience a massive crash.
Weekly Bollinger Bands Flash 2017-Style Setup
According to CryptoInsightsuk, the current compression and positioning of the Bollinger bands resemble conditions seen in March 2017, a period that preceded a rapid decline in Bitcoin dominance and the start of a powerful altcoin rally season.
The weekly candlestick chart shows Bitcoin dominance pressing near the mid-to-upper Bollinger Band region around 59%, with the bands now tightening. In previous cycles, particularly in 2017, a similar band structure led to a high-velocity crash that pushed BTC’s dominance downwards for many weeks. This is visible in the grey zone labelled in the chart below as the “Previous ALT Season Start Point.”
According to the analyst, this tightening of Bollinger Bands is expected to result in a downward move that pushes the BTC dominance to the mid-30%. This is highlighted in the chart below as a target range between 30% and 35%, with a mid-level of 33.5%.
Liquidity Rotation And The Altcoin Effect
Another crypto analyst known as Bird responded to the analysis with a note that charts are pointing to a violent move down in Bitcoin dominance. As noted by the analyst, violent downward moves in BTC.D have always coincided with aggressive liquidity rotation into altcoins. A quick drop in Bitcoin’s market share is due to more capital flowing into the altcoin market than into BTC.
In the analyst’s view, once dominance breaks convincingly, major cryptocurrencies such as Ethereum and XRP will start to gain meaningful market share. Bird specifically noted that XRP may be positioned for a strong move through March and beyond, citing reasons of ongoing infrastructure development tied to Ripple’s ecosystem.
That said, predictions of a crash in BTC dominance are not new. Market participants have been anticipating the start of a full-scale altcoin season for the past several months. However, Bitcoin’s dominance has held steady, even during periods of price crashes. This is because periods of outflows from Bitcoin have always led to corresponding outflows from other cryptocurrencies.
At the time of writing, Bitcoin is currently at 57.7%, down by 1.34% in the past 24 hours. A breakout above the prior alt-season start zone in the 60% range could invalidate the bearish thesis and extend Bitcoin’s control further into 2026.
Featured image from Pixabay, chart from Tradingview.com
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