Bitcoin Dominance Signals Potential 50% Altcoin Crash
Gareth Soloway, chief market strategist at VerifiedInvesting.com, has issued a warning to investors about the potential decline of altcoins. Soloway points out that Bitcoin's dominance chart is flashing a signal that has preceded major market turns before. The chart shows that Bitcoin dominance has broken above a long-running downward trend line, and if it holds above that level, Soloway expects dominance to climb further.
He estimates that a 10% fall in Bitcoin could push it back to the mid-$70,000 range, with altcoins losing 30% to 40%. A deeper 20% correction in Bitcoin could see altcoins drop as much as 50%. The level to watch is $81,000, as a daily close below it would mean Bitcoin's current bull flag pattern has failed and could open the way toward $70,000.
Soloway also notes that Bitcoin's short-term chart remains bullish, but he flags two concerns: a trend line drawn from earlier lows that is acting as resistance, and a heavy trading zone above the price where many holders who bought earlier may sell to break even.