Bitcoin Dominance Continues to Rise. How Much Longer?

Bitcoin Is Still The Best Place To Be, For Now.

There are times in the cryptocurrency market where the altcoins just dominate and significantly outperform Bitcoin. We love those periods as they quickly grow our overall Bitcoin holdings. Unfortunately, this is not one of those times and the alts have been lagging Bitcoin.

The chart below is a picture of the total cryptocurrency market cap dominance. At this time last year, Bitcoin dominance was still at 85% and we were on the cusp of a massive altcoin run that was led by Ethereum. Between March and June, the BTC dominance fell to a low of 37% before gaining ground during the overall cryptocurrency correction that followed. Will we see a repeat of that in March or April of this year?

We have since seen periods of back and forth where Bitcoin dominates and then the alts rally big. Many traders and investors remember September & October 2017 where the best place to be was Bitcoin. Most charts priced in BTC saw significant corrections and so far the first two months of 2018 have seen a similar pattern.

Bitcoin dominance hit a low of around 32% in January and has since climbed back up to 40%. We're now seeing some rally attempts in the alts and many are hitting longer term oversold conditions relative to Bitcoin. However, we could see this overall downtrend continue. For how long?

I don't expect the BTC dominance to climb back up to the 64% mark this time around but rather see it peaking before then. I'm looking for the low 50% area to be the new ceiling and for this target to be reached in April.

Now, that does not mean that I will not hold any alts during this time. It just means that overall, I expect that Bitcoin will continue to gain ground. However, there are always alts that buck the trend and will outperform Bitcoin. Some of those charts below.

Update On Bitcoin Price Action

The past week has been one of constructive consolidation around the $11K mark. The daily chart continues to look positive and we are now edging out of the longer downtrend. The near-term price to watch is the recent high around $11.8K as that will be a key resistance point to overcome. Getting above that will confirm a change in trend for the bigger picture.

The dip we saw from 11.8K down to 9.3K served as a healthy pullback after the rally from the lows and created a higher low and new area of support.

Some Altcoins to Watch Here

Today I completed an in-depth chart analysis of the top 100 names I watch. The summary is that there are very few names that look strong versus Bitcoin but there are many that I believe are close to the lows. Below are a few names that are setting up for a potential reversal and outperformance relative to Bitcoin. Some of these have already been strong and may be looking to go further.

NANO had a very strong run in late February and has since been consolidating the move. I'm watching for a breakout and another leg up.

XMR - Monero has been narrowing vs BTC and is now trying to break out. Strong buying volume is also showing up.

BAT - Basic Attention Token has been forming a falling wedge pattern and is now trying to break above it. If this plays it, it has 35% upside target from current level.

ICN - Iconomi is a project that has been around for a while and one I personally would like to see gain more traction. Over the past two days, we've seen a massive volume spike. We've seen moves like this in the past so I'm always suspect but this one is coming at the lows after a deep correction.

ETH - I'm watching for a potential double bottom to form on the ETH/BTC chart. The RSI is also showing a slight bullish divergence but we need to see a reversal soon if this is to play out.

STRAT - Stratis is trying to form a low here after pulling in 60% from the highs. We're also starting to see some buying volume lately.

TRX - Tron has seen a deep decline from the highs but it was significantly overpriced at those level. We're seeing some strong price action recently with Tron recently being added to Bittrex. While there is still doubt about the long-term potential of this project, we could see a decent bounce here.

DRGN - Dragon Chain is a project I like longterm and after a deep decline, it's been showing some attempts to put in a low. This is the 4 hour chart for a closer look.