Bitcoin Analysis: BTC Drops, Altcoins Ready to Soar

Maswanda.site - According to renowned crypto analyst Dan Gambardello, the crypto market is on the brink of a significant phase. Based on technical analysis and volume data over six and a half years, Gambardello predicts significant market volatility in the next two months.

Altcoin Season Prediction

Gambardello's analysis predicts the start of altcoin season or altseason, accompanied by a significant drop in BTC dominance.

He presented a graphical analysis of the main coin's dominance trends from 2017 to the present, highlighting the inverse relationship between BTC dominance and the altcoin market, especially during high volatility periods.

The analyst's presentation detailed how BTC dominance decreased during the altcoin boom in the 2017 and 2021 bull runs. The chart revealed a recurring pattern where Bitcoin dominance shows cyclical trends, rallying before the subsequent drop.

Moreover, Gambardello showcased two moving average (MA) indicators, whose cross-points historically signal the decline of dominance.

Indicators Leading to a Decline

Coin Edition reported that Gambardello's chart shows these MAs approaching a cross-point once again. Data also indicates that Bitcoin dominance is nearing its peak, with signs of losing momentum.

As a result, the analyst predicts a potential decline in BTC dominance, indicating a shift in investment from Bitcoin to altcoins or substantial capital flow into the altcoin market.

Historical market behavior supports Gambardello's prediction. Typically, Bitcoin reaches new highs, marking the beginning of a bull cycle. This is followed by an accumulation period, leading to renewed capital inflow that drives a parabolic rally in various altcoins.

The emotional dynamics of the crypto market also play a crucial role in this development. Retail investors often hesitate during the initial rally due to fear, uncertainty, and doubt (FUD).

This cautious approach is soon replaced by FOMO, driving investors into the market, resulting in extraordinary rallies and high volatility.

Importance of Monitoring Bitcoin Dominance

Gambardello's predictions align with a broader understanding of crypto market cycles. Bitcoin dominance tends to rise during market corrections and consolidation, where investors seek the relative safety of the largest crypto.

Conversely, during bull runs, altcoins often outperform Bitcoin, causing a decline in dominance as investors seek higher returns.

The upcoming decline in Bitcoin dominance could signal a favorable period for altcoin investors. If historical patterns hold, altcoins might see significant gains as Bitcoin dominance weakens.

Investors should prepare for a volatile yet potentially profitable market phase, marked by sharp movements in both Bitcoin and altcoins.

Author and Publisher: Riswanda Nurrohman
Source: Blockchainmedia.id