- The altcoin positioning chart showed that alts have been performing well against Bitcoin lately.
- Their market capitalization has grown steadily, alongside BTC’s price gains.
The Bitcoin [BTC] The slump in early May lasted only a short time. The ETF inflows were negative for about a week at the beginning of the month, but have increased rapidly since then.
The past two weeks have seen consistent inflows, highlighting the presence of demand behind Bitcoin.
Altcoin performance over the past month was also positive. Memecoins were among the top individual players, but the rest of the altcoin market also expanded its market capitalization.
Will the pattern of the past nine months repeat itself again?
Crypto analyst Jessica Miranda observed in a message on X (formerly Twitter) that altcoins were more famous than Bitcoin. While Bitcoin still held just over 54% of the market share, the alts have been outperforming the king lately.
The analyst noted that this usually does not last long and is also usually followed by a drop in BTC prices. That was true for much of the past nine months, as the rally began in earnest in September 2023.
However, over the longer term, even intense bull runs can have periods where altcoins outpace Bitcoin. The 2016-2017 run had many such moments. There were fewer such events during the 2020-21 run, but a BTC rally did see a favorable altcoin moment.
The 2022-2023 bear trend was when this pattern became clearer. If it repeats again, Bitcoin could see a dip in the next two weeks.
Taking into account Bitcoin’s recent breakout past the $67,000 resistance, such a dip was unlikely. Still, it is something traders may need to be prepared for.
What Does the Bitcoin Dominance Chart Reveal?
Source: BTC.D on TradingView
BTC dominance was approaching a short-term low of 54%, meaning it was likely to bounce back soon.
Such a rebound would undermine any rally the altcoin market has initiated, but it would also undermine expectations of a BTC price decline on the altcoin positioning chart.
Source: TOTAL2 on TradingView
The suggestion that the altcoin market could see a downturn gained more credence when the altcoin market cap, or the market cap of the entire crypto ecosystem minus Bitcoin’s, was analyzed.
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The market cap chart was approaching a key resistance area at $1.24 trillion. From a technical analysis perspective, a rejection from that region was expected, although this resistance would eventually be broken given the strong uptrend over the past eight months.
Based on technical analysis, a Bitcoin peak and a (temporary) slump of the altcoin are therefore expected in the first half of June.