Bitcoin, the world’s largest cryptocurrency, is losing its dominance in the market, changing the crypto scene. Analysts believe cryptocurrencies could soon come into the spotlight as their market share drops to 55.80% and a confirmed sell signal flashes for the first time since 2020. As Bitcoin’s price struggles to maintain momentum and falls below key trendline support, this sentiment is gaining traction.

Bearish signals trigger altseason conjectures

The Relative Strength Index (RSI), which indicates Bitcoin’s dominance, is below its midline, reinforcing negative expectations. Such situations in the past have paved the way for the so-called “alt season” – a time when other cryptocurrencies shine over Bitcoin. Experts believe that capital from Bitcoin could flow into altcoins, which could lead to instability and new investment prospects.

This trend corresponds to the lower holdings of long-term Bitcoin investors and is therefore not just theoretical. Recent data from IntoTheBlock shows that wallets that have held Bitcoin for more than 155 days currently only hold about 12.45 million BTC, the lowest number since mid-2022. These balances, which fell by almost 10%, suggest that some People cashed in their winnings or moved their money into cold wallets.

Bitcoin: Decline in Long-Term Holdings

As the expected $100,000 target for Alpha coin approaches, the price of Bitcoin is facing strong resistance. Multiple failures at $97,500 resulted in sharp declines. Bitcoin fell even more on Tuesday, selling at around $93,940. This volatility is accompanied by a significant decline in long-term assets, making it difficult to say where the market is heading.

Even if the current decline in inventories is less severe than in 2021 or 2017, it highlights a changing market attitude. Some observers say this behavior reflects deliberate repositioning by experienced investors trying to adapt to changing market conditions.

Rare bullish signal gives hope despite bearish sentiment

Despite the negative undertones, a rare bullish note offers hope. The Spent Output Profit Ratio (SOPR) recently in line with the moving averages suggests that Bitcoin could see a rally over the next month or two. Such signs are rare, only once or twice during an up market cycle.

Although downward pressure is still evident, experts note that these positive signals present some good opportunities for risk-tolerant investors. In line with previous patterns following halving events, market watchers are also preparing for a possible plunge as January 2025 approaches.

For now, Bitcoin’s declining dominance and increasing volatility highlight the need for a careful but strategic approach. Whether it’s an altseason or a new Bitcoin surge, the next few months could change the cryptocurrency scene.

Featured image from DALL-E, chart from TradingView