Rising Bitcoin Dominance Signals Altcoin Correction
Gareth Soloway, chief market strategist at VerifiedInvesting.com, warns that altcoins may be heading for a correction even if Bitcoin only dips slightly.
Soloway says Bitcoin dominance is flashing a signal that has preceded major market turns before. He explains that many traders assume rising dominance means Bitcoin is doing well, but in practice it often rises because Bitcoin slips a little while altcoins fall much harder.
According to Soloway, Bitcoin dominance has broken above a long-running downward trend line and may climb further if it holds above that level. This leaves two likely outcomes: either Bitcoin moves sideways while altcoins lose ground or Bitcoin pulls back slightly while altcoins fall steeply.
Soloway 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%, and Soloway warns that the level to watch is $81,000.
Soloway notes that despite this warning, Bitcoin's short-term chart remains bullish, but he flags two concerns: a trend line drawn from earlier lows acting as resistance and a heavy trading zone above the price where many holders who bought earlier may sell to break even.