Key Takeaways:
- A crypto analyst has predicted that the altcoin season will end soon.
- The analyst based his argument on Bitcoin dominance becoming oversold.
- BTC’s price continued consolidating below $35,500.
NEW DELHI (CoinChapter.com) — The altcoins market might be slated for a massive correction in the coming days due to a weird relationship with Bitcoin (BTC) market dominance, according to a crypto analyst.
X account ‘Crypto Analyst‘ warned its 51,000 followers that the altcoin market would likely see a 30-60% drop “in the next few days.”
The analyst highlighted a strange relationship between Bitcoin’s market dominance and altcoin prices. He noted that when Bitcoin dominance becomes oversold, it usually signals a top for the altcoin market.
Furthermore, Crypto Analyst highlighted that BTC dominance had become oversold on the 1-hour, 4-hour, and daily timeframes. He claimed that in the past when BTC dominance “got this oversold,” the altcoin markets had entered a corrective phase.
Bitcoin Dominance And Altcoins
Bulls might ignore the Crypto Analyst’s warning as the wider crypto markets seem to be rallying, with altcoins leading the charge. Moreover, Bitcoin dominance becoming oversold has not always resulted in a reversal in the altcoin market.
Since 2021, the Bitcoin dominance has become oversold, on the daily timeframe as well as the 4-hour and 1-hour ones, multiple times. However, there have been instances when the altcoin market cap (the orange wave) has spiked instead of going down, such as between March 15, 2022, and March 25, 2022.
Furthermore, the altcoin market cap corrected even when BTC dominance was rising or overbought, for instance, in early May 2022.
As such, several traders have dismissed Crypto Analyst’s warnings, believing that there is a very slight chance of the altcoin season ending soon.
BTC Price Continues Consolidating
Meanwhile, Bitcoin price continued consolidating near $34,500 as bulls pushed back against profit booking. BTC price dropped nearly 1.5% on Nov. 7 before recovering some lost ground. The long lower wicks on recent daily candles highlight bulls’ efforts to hold above the $34,000 price level.
However, if the selling pressure increases, the BTC price might drop to the 20-day EMA (the red wave) support near $33,400. Moreover, breaching the immediate support level might force bulls to defend the 50-day EMA (the purple wave) support near $30,830.
On the other hand, a rally from here would see the BTCUSD trading pair face resistance near $36,500. However, breaking and consolidating above the immediate resistance might help Bitcoin price target the resistance near $38,620 before correcting.
The RSI for BTC remained overbought, with a score of 72.53 on the daily charts.
