Bitcoin Market Share Hits 58% as Altcoin Drives Falter
Bitcoin dominance continued to rise amid anticipation of an altcoin season at the start of the year. The crypto market has faced harsh headwinds in the last two weeks, reshaping whale holdings and asset dominance. This stems from a flurry of macro factors as global politics intensify crippling digital assets. Overall, the wider crypto market cap is above $3.5 trillion following Bitcoin’s recovery.
BTC Price Outpaces Altcoins
On-chain data shows Bitcoin dominance stands at 58% and is projected to hit 60% after trades in the last two weeks. The dominance index points to a 15% decline in most altcoins compared to the market leader. Bitcoin has risen by 55% in the last three years compared to several altcoins. This gain comes despite anticipated fund transfer to other assets after Trump’s inauguration.
Last year, most crypto users projected an altcoin season with historical data. After a sharp increase in BTC price, altcoins tend to perform better once Bitcoin hits a cycle peak. Shaky trades and more investor appetite in BTC have spiked its dominance while altcoins struggle. Ethereum, an asset projected to ignite the season, continued a sideways pattern for the last two to three quarters, even after the approval of spot Ethereum ETFs.
ETH price trades at $3,219, dropping below the $3.5K after bulls anticipated a run to $5K. This was heightened by XRP’s stellar climb above $3 with billions in its market cap. Notably, Solana and Cardano also made significant gains last quarter with a similar rise in decentralized finance (DeFi) trading volumes.
“… Many experts, including myself, predicted that January 2025 would mark the official start of the altcoin season, especially after #Trump inauguration. But now, as the month comes to a close, we still haven’t seen any significant movement… Over the past two years, Bitcoin has surged by more than 500%, yet Ethereum hasn’t even surpassed its previous ATH. And historically, Ethereum leads the altcoin season,” mrgibenny wrote on X.
Institutional Traders Back Bitcoin
Among the factors behind the BTC price surge, large-scale market players top the list. Following the approval of spot Bitcoin ETFs, the asset’s pitch has maintained an upward momentum. Tapping $73K in Q1 2024, it broke $93K after Donald Trump’s election win in November and eventually crossed $107K before the recent corrections.
The inflow of funds and confidence in clearer regulations in the country led to more investors backing the market leader above other assets. Moves to pass a Strategic Bitcoin Reserve Bill in Congress and similar efforts in states result in a higher Bitcoin dominance.
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Avalanche Forms A Falling Wedge On The Daily Chart – Breakout Target Set At $56
Avalanche has faced intense selling pressure over the past two months, with its price plunging more than 42% since mid-December. The market remains highly volatile, driven by uncertainty, but recent signs of recovery suggest a shift in sentiment. After days of positive price action, AVAX is showing signs of strength, and analysts are watching closely for a potential breakout.
Top analyst Carl Runefelt shared key insights on X, revealing that AVAX has formed another falling wedge on the daily timeframe. This pattern, widely recognized as a bullish reversal indicator, signals that a massive upside move could follow if AVAX breaks out. Runefelt highlights that the breakout target for AVAX is around $56, aligning with key resistance levels.
As the crypto market gears up for a potential bullish phase, Avalanche’s price action in the coming weeks will be crucial. If the wedge formation plays out as expected, AVAX could see a strong rally, attracting renewed investor confidence. However, traders remain cautious, as failure to break above key levels could lead to continued consolidation or even further downside. All eyes are now on Avalanche as it approaches a decisive moment.
Avalanche Eyes Breakout Amid Bearish Market Pressure
Avalanche has shown signs of recovery in the past few days, surging over 13% from a key support level. This move has sparked optimism among investors, but the broader bearish trend that has dominated the market since late December remains a concern. If AVAX fails to reclaim key supply levels as support, the recent gains could be short-lived, and the downtrend may continue.
Top analyst Carl Runefelt shared a technical analysis on X, revealing that AVAX has formed another falling wedge on the daily timeframe. This pattern is widely considered a bullish reversal signal, suggesting a significant breakout could be on the horizon. According to Runefelt, once AVAX breaks out, the target is set at the top of the pattern at $56—an impressive 64% rally from current levels.
However, there are still risks that traders must consider. While a falling wedge breakout could signal the start of a new bullish phase, AVAX must first overcome key resistance levels to confirm a trend reversal. If bulls fail to hold current support levels and push the price above these barriers, AVAX could face further downside pressure.
AVAX Price Faces Key Resistance
Avalanche (AVAX) is currently trading at $34.4 after a highly volatile Friday, where the price surged to $36.1 before retracing the entire daily move. This rapid price swing reflects the uncertainty in the market as AVAX struggles to find direction.
For bulls to confirm a potential reversal, the price must reclaim the $36 mark as soon as possible and establish support above it. Additionally, AVAX needs to hold above the 200-day exponential moving average (EMA) at $34.6, a crucial technical level that could determine the short-term trend. A sustained move above these levels would reinforce bullish sentiment and potentially trigger a rally toward higher resistance zones.
However, failure to hold above the 200-day EMA could result in increased selling pressure, pushing AVAX toward lower demand levels around $31.7. This would signal a continuation of the bearish trend that has dominated the market since mid-December.
With the market still experiencing uncertainty and price swings, the coming days will be crucial for AVAX’s trajectory. If bulls regain control and reclaim key levels, a strong upward move could follow. Otherwise, further consolidation or downside movement remains a possibility.
Featured image from Dall-E, chart from TradingView
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