BTC Dominance Shift

Welcome to the NoFomo Capital Newsletter, your go-to resource for cutting-edge crypto research and level-headed market analysis to navigate the complexities of the crypto market. We help investors stay sane with all the noise out there. We help you see clear and zoom out to the big picture so you don’t fumble your bags.

Bitcoin Dominance & Alt Season Update

Last week, we mentioned that the bull flag that has formed. Bitcoin Dominance (BTC.D) is breaking its multi-week diagonal resistance, with potential to see a post-breakout retest into the trend line:

BTC Dominance did pull back around New Year back retesting the trend line. Nonetheless, 3 weeks ago BTC DOM broke out once again and surged past resistance levels to 64% with a huge upside whick.

As a result all the noise on CT (Crypto Twitter) chants “Alt Season is cancelled”. Obviously, there is no reason to assume that based on macro and history. I say it again: History does not repeat exactly, but it rhymes usually.

It just means: Bitcoin Season is still on.

Now that BTC.D has surpassed its 59% resistance level (yellow zones), there’s a possibility of a retracement below this threshold, potentially pullback into the 53% zone or even lower. Such a pullback could create an Altcoin Window—a phase where altcoins have an opportunity to gain momentum again. The sharper and more volatile this retest to the downside, the more favorable conditions may become for altcoins.

However, if BTC.D skips this post-breakout retest, its next key objective will be to push beyond and establish control over the red ~64.5% mid-point of the broader historic macro range (57%-71%) that goes back to 2018. If BTC.D established itself in that higher range, then chances increase to push expected alt season timeline further into Q2 2025.

And why does this matter?

Historically, every time BTC dominance (BTC.D) breaks the mid-point, it revisits the red macro Range High near 71%.

Once BTC.D reaches this key resistance (or gets close to it), a sharp drop is typical based on history—a massive flush, similar to previous rejections at 71%. This kind of move happens during the mid and end-stage of parabolic altseason and typically happens near the end of a bull run.

Bitcoin Dominance declines later in the bull market

As usual, retail investor confidence and speculation will increase in later stages of this bull market. As euphoria grows, retail investors will start taking riskier bets on altcoins. The Normie Thought: “Altcoins Offer Higher ROI. Bitcoin’s market cap feels already huge. I need small-cap altcoins that may 10x-100x and make me rich.”

For now, BTC.D remains in a strong macro uptrend, but there will be brief Altcoin Windows during post-breakout retests. If these moments align with Altcoin Hype Cycles, we could see some explosive altcoin moves.

5 Reasons for Decoupling of Bitcoin and Altcoins towards end of bull season

Decoupling refers to altcoins breaking their strong correlation with Bitcoin’s price movements. Normally, altcoins follow Bitcoin, but during true altseason:

• Bitcoin consolidates or moves sideways, while altcoins explode upwards.

• Some altcoins can pump even if BTC drops slightly, indicating a strong decoupling, driving all hopes to altcoins.

• Altcoins in hot narratives rally aggressively. Hot narratives are not a secret anymore towards the end of the bull market. FOMO frenzy.

• Retail traders forget about BTC and go all-in on alts, making dominance drop further.

Block out the noise – Do not fumble your bag

Historically, every cycle Bitcoin tends to break to its second Price Exploration phase around Week 16 after the breakout from the post bear market consolidation phase.

Now, is week 16. However, historic never repeats exactly. It rhymes.

I know you are all really impatient for the Alteasons. Here is some wisdom for you Fomo-Fools:

Do not overtrade now. Do not keep switch around Alt coins because you are impatient for Alt Season. Don’t chase the next shiny project – aping into green candles. Keep your bags few and strong. Choose projects with strong fundamentals or blue chip projects. Be patient and do not listen to the noise on CT. Everything is on track. However this phase is extremely volatile – Avoid major leverage. Do not try to be smarter than everyone else. (Chance is: You aren’t). Now, just let time work for you. Remember it’s a bull market year. Chance is high, every fool will print green sitting on his boring Alts in spot positions.

We will keep an eye on BTC DOM’s for you—to let you know what’s coming next!

Thanks for reading.

NoFomo Capital