Over the weekend, altcoins retreated after a huge market-wide rally, starting with Ethereum. And while the market seemed to be getting bearish, news of a massive Bitcoin purchase by automaker Tesla set the crypto market on fire.
For bitcoin pairs, altcoins began to bleed across the board. However, after a certain technical indicator and BTC dominance, the price move could be nothing more than a short-lived cleanup before the full alt-season begins.
Tesla buys Bitcoin, crypto fever is boiling over
As if the magma-hot crypto market needed another reason for the coin trending, an SEC filing revealed that Tesla had purchased $ 1.5 billion worth of BTC.
The purchase itself was made some time before, but news of this sparked a wave of FOMO and prices began to skyrocket. Exchanges like Binance fell due to demand from investors looking to buy Bitcoin.
Related reading | The altcoin season is here: “Buy Crypto” outperforms Bitcoin searches on Google
Not only do they want to buy more BTC for more benefits, but given the support from Elon Musk, crypto investors have even dumped altcoins in exchange for more bitcoin.
However, according to the Ichimoku Kinko Hyo technical indicator and BTC dominance, looks can be deceptive.
News is streaking altcoins, but BTC Dominance is suggesting it’s a shakeout
BTC dominance is a metric that weighs the huge market share of Bitcoin commands against the rest of the room. The top cryptocurrency has long had a dominance of two-thirds or more, but is at risk of losing it for good.
After another attempt to hit new highs in dominance, BTC plunged and fell below 63% as Ethereum broke its previous record and other alts rose.
BTC.D is rejected by the Ichimoku cloud in weekly periods Source: CRYPTOCAP-BTC.D on TradingView.com
And while it looks like the dominance is ready to reverse again, the Ichimoku suggests that this be a bearish retest. In the table above, the green candle tries again to break into the cloud at weekly intervals. Three failed weeks left wicks in the cloud, but another upward trend in dominance has not occurred.
Related reading | Altcoin market cap on the verge of a life changing breakout
After repeated rejections, the most likely scenario for BTC dominance has failed. And when that happens, the recent altcoin rallies were hardly the start of what is to be turned upside down.
In higher monthly periods the story is similar. A massive green candle has been completely engulfed by bears, meaning that altcoins have finally turned the corner against Bitcoin.
In monthly periods there are even more bearish signals Source: CRYPTOCAP-BTC.D on TradingView.com
Price movements on monthly BTC.D charts show that a red candle barely hangs from the baseline, even with Ichimoku. A line below this indicates another disadvantage.
It is likely to dip well below 63% if resistance of support continues to reject BTC.D. Could the biggest old season so far be just a few days away? To add more credibility to the theory, Google searches for “buy crypto” recently topped the “buy bitcoin” mark for the first time.
Featured image from deposit photos, charts from TradingView.com